A flat yield curve indicates generally cheaper long-term borrowing costs than short-term borrowing costs.

Question

Quizplus · Accepted Answer

A flat yield curve typically indicates that short-term and long-term borrowing costs are relatively equal, which may not necessarily result in cheaper long-term borrowing costs compared to short-term borrowing costs. In contrast, a steep yield curve indicates higher long-term borrowing costs compared to short-term borrowing costs.

A Flat Yield Curve Indicates Generally Cheaper Long-Term Borrowing Costs