The term structure of interest rates:
A)describes the relationship between maturity and yield for similar securities.
B)ranks security yields according to the default risk structure.
C)describes how interest rates vary over time.
D)describes the pattern of interest rates over the business cycle.

Question

Quizplus · Accepted Answer

The term structure of interest rates, also known as the yield curve, describes the relationship between the interest rates (or yields) of bonds with different maturities but similar credit quality.

The Term Structure of Interest Rates