The yield curve
A) shows the nominal interest rates on bonds of various durations.
B) shows the expected profitability of various investment projects.
C) shows the expected rates of return on various stocks.
D) shows the expected selling price of used assets.

Question

Quizplus · Accepted Answer

The yield curve represents the relationship between the nominal interest rates (or yields) on bonds of different maturities but similar credit quality. It typically plots interest rates on the vertical axis and time to maturity on the horizontal axis, illustrating how interest rates extend over time.

The Yield Curve