The yield curve depicts the current relationship between:
A)Bond yields and default risk
B)Bond maturity and bond ratings
C)Bond yields and maturity
D)Promised yields and default premiums

Question

Quizplus · Accepted Answer

The yield curve displays the relationship between the yields of bonds and their maturities. A yield curve plots the yields of bonds on the vertical axis and the maturities of bonds on the horizontal axis. Therefore, option C is the correct answer. Option A refers to the relationship between bond yields and default risk, which varies independently of bond maturity. Option B describes the relationship between bond maturity and bond ratings, but there is no reference to yields. Option D describes promised yields and default premiums, which may vary independently of bond maturity.

The Yield Curve Depicts the Current Relationship Between