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this is the question write up : Country A: β€œThe government yield curve has changed little in terms of its level and shape during the last few years, and I expect this trend to continue. We assume that future spot rates reflect the current forward curve for all maturities.” Country B: β€œBecause of recent economic trends, I expect a reversal in the slope of the current yield curve. We assume that future spot rates will be higher than current forward rates for all maturities.”Country C: β€œTo improve liquidity,Country C’s central bank is expected to intervene, leading to a reversal in the slope of the existing yield curve. We assume that future spot rates will be lower than today’s forward rates for all maturities.” This is the question : 33. Based on Exhibit 1 and Tyo’s expectations, which country’s term structure is currently best for traders seeking to ride the yield curve? A. Country A B. Country B C. Country C

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A is correct. Country A’s yield curve is upward slopingβ€”a condition for the strategyβ€”and more so than Country B’s. This is the ans which is country A but don’t you think that the statement “We assume that future spot rates reflect ...

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