A graphic representation of the relationship between interest rates on a particular security and different terms to maturity for that security is called the
A)term structure of interest rates.
B)yield curve.
C)geometric average.
D)discount basis.

Question

Quizplus · Accepted Answer

A yield curve is a graph that plots the relationship between interest rates and time to maturity for a set of fixed-income securities with the same credit quality. It provides a visual representation of the term structure of interest rates. The yield curve can be upward sloping (indicating that longer-term interest rates are higher than short-term interest rates), downward sloping (indicating that short-term interest rates are higher than long-term interest rates), or flat.

A Graphic Representation of the Relationship Between Interest Rates on a Particular