The connection between term and interest rates is called:
A)interest rate risk.
B)price risk.
C)term structure of interest rates.
D)default structure of interest rates.

Question

Quizplus · Accepted Answer

The connection between term and interest rates is referred to as the term structure of interest rates. This refers to the relationship between the interest rates on bonds with differing maturities. It is also known as the yield curve. Option A refers to the risk that results from changes in the interest rates, while option B refers to the risk that results from changes in the price of a security. Option D refers to the structure of interest rates for borrowers depending on creditworthiness.

The Connection Between Term and Interest Rates Is Called