The yield curve's typical shape suggests

Question

Quizplus · Accepted Answer

The yield curve's typical shape shows that short term debt carries lower interest rates than long term debt, which is represented by a upward sloping curve. Therefore, option C is correct. Option A is incorrect because short-term debt carries lower interest rates. Option B is incorrect because the yield curve's typical shape is not a flat curve, and therefore, short term debt does not carry about the same rates; it carries lower rates. Option D is incorrect because the yield curve's typical shape indicates differences in rates due to maturity difference.

The Yield Curve's Typical Shape Suggests