Typically,yield curves are
A) gently upward-sloping.
B) gently downward-sloping.
C) flat.
D) bowl shaped.
E) mound shaped.

Question

Quizplus · Accepted Answer

Yield curves are typically gently upward-sloping, indicating that long-term interest rates are higher than short-term interest rates. This shape reflects the market's expectation of future economic growth and inflation, as well as the risk premium associated with holding onto a long-term investment. Downward-sloping yield curves, on the other hand, typically indicate an impending recession or economic slowdown. Flat yield curves can suggest economic uncertainty, while bowl or mound-shaped yield curves are rare but have been observed during periods of extreme market volatility.

Typically,yield Curves Are