[Pass CPA]

Hi,

Could anyone kindly explain why is Option D incorrect for the below mentioned question.
An entity is examining potential investments and notes that 1-year maturity yields are higher than those for 10-year maturities. Which of the following explanations for this occurrence is best?
A. Investors are expecting reduced inflation in the future as reflected in the lower long-term returns.
B. The short-term investments have higher liquidity and therefore carry a higher rate of interest.
C. The long-term instruments provide a longer stream of investment income and therefore carry a lower rate of return.
D. The short-term investments carry a more immediate default risk premium resulting in higher rates of return.

TIA