The yield curve
A) is a graphical depiction of term structure of interest rates.
B) is usually depicted for U.S. Treasuries in order to hold risk constant across maturities and yields.
C) is usually depicted for corporate bonds of different ratings.
D) is a graphical depiction of term structure of interest rates and is usually depicted for U.S. Treasuries in order to hold risk constant across maturities and yields.
E) is a graphical depiction of term structure of interest rates and is usually depicted for corporate bonds of different ratings.

Question

Quizplus · Accepted Answer

The yield curve is indeed a graphical representation of the term structure of interest rates, typically shown for U.S. Treasuries to maintain consistency in risk across different maturities and yields. This helps in comparing interest rates without the added variable of credit risk differences that would come with comparing corporate bonds of different ratings.

The Yield Curve