1. Understanding the relationship between the slope of the yield curve and investment risk: The yield curve plots interest rates of bonds with different maturity dates, showing the relationship between time and yield. The slope indicates expectations about interest rates and risk. - A positive slope means long-term yields are higher than short-term yields, generally signaling that long-term investments are riskier because investors demand more return for more risk. - Conversely, a negative slope (inverted yield curve) suggests short-term rates are higher, indicating short-term investments may be riskier. - A flat curve means little difference in yields across maturities, implying similar risk for short and long-term investments. Based on this: - The correct option is: "A negative slope indicates that short-term investments are riskier than long-term investments" is true, in the sense an inverted yield curve implies higher short-term rates and thus higher short-term risk. 2. Identifying the best financial institution to purchase insurance: - Contractual institutions (like insurance companies and pension funds) specialize in long-term contracts and managing risks, including insurance. - Depository institutions (banks, credit unions) mainly accept deposits and offer loans, usually not selling insurance. - Investment institutions manage investments but don't usually sell insurance. - Therefore, the best choice to purchase insurance is a "Contractual institution". Final answers: - Question 8: \textbf{A negative slope indicates that short-term investments are riskier than long-term investments}. - Question 15: \textbf{Contractual institution}.