The term structure of interest rates or yield curve is the pattern of interest rate yields for debt securities that are similar in all respects except for differences in:

Question

Quizplus · Accepted Answer

The term structure of interest rates or yield curve is based on the differences in the term or maturity of debt securities. Yield curves reflect the market's expectations of future interest rates and provide insight into the economy's expectations of growth and inflation over time. Differences in tax status, liquidity, and risk of default may also impact interest rates, but they are not the primary determinant of the yield curve.

The Term Structure of Interest Rates or Yield Curve Is