The yield curve
$$\begin{array} { l | l }
\hline \text { Year } & \text { 1-Year Forward Rate } \
\hline 1 & 5.8 \% \
\hline 2 & 6.4 \% \
\hline 3 & 7.1 \% \
\hline 4 & 7.3 \% \
\hline 5 & 7.4 \% \
\hline
\end{array}$$
A)is a graphical depiction of term structure of interest rates.
B)is usually depicted for U.S.Treasuries in order to hold risk constant across maturities and yields.
C)is usually depicted for corporate bonds of different ratings.
D)A and B.
E)A and C.

Question

The yield curve
$$\begin{array} { l | l } 
\hline \text { Year } & \text { 1-Year Forward Rate } \
\hline 1 & 5.8 \% \
\hline 2 & 6.4 \% \
\hline 3 & 7.1 \% \
\hline 4 & 7.3 \% \
\hline 5 & 7.4 \% \
\hline
\end{array}$$
A)is a graphical depiction of term structure of interest rates.
B)is usually depicted for U.S.Treasuries in order to hold risk constant across maturities and yields.
C)is usually depicted for corporate bonds of different ratings.
D)A and B.
E)A and C.

Quizplus · Accepted Answer

The yield curve is a graphical depiction of the term structure of interest rates (A) and is often depicted for U.S. Treasuries to maintain a constant risk across different maturities and yields (B).

The Yield Curve A)is a Graphical Depiction of Term Structure of Interest Rates