The term structure of interest rates:
A) always results in an upward sloping yield curve.
B) represents the variation in yields for securities differing in maturities.
C) usually results in a flat yield curve.
D) usually results in a downward sloping yield curve.

Question

Quizplus · Accepted Answer

The term structure of interest rates represents the variation in yields for securities with different maturities. This variation can result in an upward, flat, or downward sloping yield curve depending on the prevailing market conditions. Therefore, option A, C, and D are incorrect.

The Term Structure of Interest Rates