If the yield curve is upward sloping, some investors may attempt to benefit from the higher yields on longer-term securities, even when they have funds for only a short period of time. This strategy is known as riding the yield curve.

Question

Quizplus · Accepted Answer

Riding the yield curve is a strategy where investors purchase long-term bonds to take advantage of higher yields compared to short-term bonds, planning to sell them before maturity as their prices increase when interest rates fall or remain stable, thus benefiting from the upward sloping yield curve.

If the Yield Curve Is Upward Sloping, Some Investors May