The term structure of interest rates
A) is often referred to as the yield curve.
B) depicts the relative level of short- and long-term interest rates.
C) is usually constructed with U.S. government securities of varying maturities.
D) All of the options are true.

Question

Quizplus · Accepted Answer

All of the options are true statements about the term structure of interest rates. The term structure of interest rates refers to the relationship between the maturity of a bond and the yield or return that it offers. This relationship can be graphed as the yield curve, which shows the yields of bonds with different maturities. Typically, the yield curve is constructed using U.S. government securities of varying maturities, and it depicts the relative level of short- and long-term interest rates.

The Term Structure of Interest Rates