Treasury bond yields are commonly used as the basis for yield curves because they are low risk and homogeneous in nature.

Question

Quizplus · Accepted Answer

Treasury bond yields are considered low risk because they are backed by the full faith and credit of the U.S. government, making them a benchmark for other interest rates. They are homogeneous because they have similar credit quality, being all issued by the same entity.

Treasury Bond Yields Are Commonly Used as the Basis for Yield