The yield curve shows at any point in time:
A)The relationship between the yield on a bond and the duration of the bond.
B)The relationship between the coupon rate on a bond and time to maturity of the bond.
C)The relationship between yield on a bond and the time to maturity on the bond.
D)All of the above.
E)None of the above.

Question

Quizplus · Accepted Answer

The yield curve represents the relationship between the yield of a bond and its time to maturity. Therefore, option C is the correct choice as it accurately describes what the yield curve shows. Option A is incorrect as it refers to duration, which is a measure of a bond's sensitivity to changes in interest rates. Option B is also incorrect as it refers to the coupon rate, which is the interest rate that a bond issuer pays to the bondholders.

The Yield Curve Shows at Any Point in Time