Yield curve

• A graph of the term structure of interest rates that depicts the relationship between the yield to maturity of a security (y-axis) and the time to maturity (x-axis); it shows the pattern of interest rates on securities of equal quality and different maturity.

• A graph showing, for securities that all expose the investor to the same credit risk, the relationship at a given point in time between yield and current maturity. Yield curves are typically drawn using yields on governments of various maturities. It is also called the termstructure of interest rates. Typically the yield curve rises with maturity.

• A graphic representation of a curve that shows Interest Rates at a specific point for all securities having equal risk but different maturity dates. Usually, government securities are used to construct such curves. See also: Flat Yield Curve; Inverted Yield Curve; Normal Yield Curve.

• The graphical depiction of the relationship between the yield on bonds of the same credit quality but different maturities. Related: Term structure of interest rates. Harvey (1991) finds that the inversions of the yield curve (short-term rates greater than long term rates) have preceded the last five U.S. recessions. The yield curve can accurately forecast the turning points of the business cycle.

• Refers to the graghical or tabular representation of interest rates across different maturities. The presentation often starts with the shortest term rates and extends towards longer maturities. It reflects the market's views about implied inflation/deflation, liquidity, economic and financial activity and other market forces.


Follow this link for all the terms related to yield.

 Embedded terms in definition
 Business cycle
Credit risk
Current maturity
Flat yield curve
Government securities
Interest rate
Inverted yield curve
Long term
Maturity date
Normal yield curve
Term structure of interest rates
Term structure
Time to maturity
Yield to maturity
 Related Terms

<< Yield burning Yield curve option pricing models >>

How to Ace Your First Test Managing Real Money in the Real World: As a teen, you're beginning to make some grown-up decisions about how to save and spend your money. That's why learning the right ways to manage money…right from the start…is important. Here are suggestions. More...

Remember not only to say the right thing in the right place, but far more difficult still, to leave unsaid the wrong thing at the tempting moment. - Benjamin Franklin


Copyright ©2009-2018 GVC. All rights reserved.