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 reflects the relationship between bond yields and maturity. It shows the interest rates for bonds of different maturities, typically ranging from three months to 30 years. Generally, a normal yield curve has a positive slope, indicating that long-term bonds yield higher returns than short-term bonds. This reflects the market's expectation that the economy and inflation will grow in the future.

The Yield Curve Depicts the Current Relationship Between