An upward sloping yield curve indicates

Question

Quizplus · Accepted Answer

An upward sloping yield curve indicates that long-term rates are higher than medium-term rates. This is the normal shape of the yield curve, where investors demand higher yields for longer-term investments to compensate for the additional risks associated with locking up their money for a longer period. This is not an indication of declining interest rates, lower quality bonds having higher yields, short-term rates rising sharply in the near future, or an inverse relationship between bond prices and yields.

An Upward Sloping Yield Curve Indicates