The yield curve
A)is a graphical depiction of term structure of interest rates.
B)is usually depicted for U.S.Treasuries in order to hold risk constant across maturities and yields.
C)is usually depicted for corporate bonds of different ratings.
D)is a graphical depiction of term structure of interest rates and is usually depicted for U.S.Treasuries in order to hold risk constant across maturities and yields.

Question

Quizplus · Accepted Answer

The yield curve is a graphical representation of the term structure of interest rates and is typically depicted for U.S. Treasuries. This is done in order to hold risk constant across maturities and yields, as Treasuries are considered to be virtually risk-free. The curve shows the relationship between interest rates and the time to maturity for a given bond, which can be informative for investors and analysts in understanding the overall state of the economy and expected future interest rate movements.

The Yield Curve