All of the following are common shapes for the yield curve except ____________.

Question

Quizplus · Accepted Answer

The yield curve can take on different shapes based on the bond maturities and their corresponding yields. However, an elliptical shape is not recognized as a common shape for the yield curve. The other choices are all common shapes of the yield curve. Upward-sloping yield curve indicates that long-term bonds have higher yields than short-term bonds. A flat yield curve occurs when the yields on short-term and long-term bonds are almost the same. An inverted yield curve occurs when short-term bond yields are higher than long-term bond yields.

All of the Following Are Common Shapes for the Yield