The term structure of interest rates describes the relationship between the rate of interest charged and the

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The term structure of interest rates refers to the relationship between the interest rate and the length of time until repayment of a loan. This relationship can take different shapes, such as an upward-sloping yield curve, where longer maturities have higher yields, or a flat or inverted yield curve, where short-term and long-term yields are similar or inverted. The other choices may affect the risk or creditworthiness of a borrower or lender, but they do not directly determine the term structure of interest rates.

The Term Structure of Interest Rates Describes the Relationship Between