The relationship between the rate of return and the time to maturity of similar-risk securities is known as the term structure of interest rates.

Question

Quizplus · Accepted Answer

The statement is true. The term structure of interest rates describes how the rate of return on a financial instrument, such as a bond, changes in relation to the length of time until maturity. It is also commonly referred to as the yield curve.

The Relationship Between the Rate of Return and the Time