The term structure can be described as the:
A) relationship of spot rates of interest and bond prices.
B) relationship of coupon rates and money rates.
C) relationship of spot rates of interest and maturity.
D) relationship of coupon rates and maturity.

Question

Quizplus · Accepted Answer

The term structure of interest rates, also known as the yield curve, describes the relationship between the spot rates of interest (yields) for debt securities and their time to maturity. This relationship is graphically represented by plotting the yields of various securities against their time to maturity, showing how interest rates vary with different lengths of time.

The Term Structure Can Be Described as The