|
|
|
Yield Curve
|
Graph plotting the Interest rate of a given issuer for a Range of different maturities.
A graphic line chart that shows Interest rates at a specific point for all securities having equal Risk, but different maturity dates. For bonds, it typically compares the 2 or 5 year treasury with the 30 year.
Under normal circumstances, the longer it takes for a CD, Bond or other investment to mature, the greater the Yield, because people demand a greater return to tie up their money for a longer time. When the difference in rates between a Short-term investment and a Long-term one is reduced, the Yield curve flattens. When economic forces cause a shorter maturity to produce a greater Yield than a Long maturity, the Yield curve is said to be inverted.
|
| Posted by
Privatebanking.com
|
|
