Question

user the u.s treasy yield curve: a. shows ythe relationship among bonds risk characteristices but diffferent maturies. b.assumes maturies are constant and reflects the differences in risk c. always has a positive slope d. always has a negetive slope

Answer 1

The U.S. Treasury yield curve shows the relationship among bonds' risk characteristics with different maturities and can provide insights into the overall health of the economy. It reflects how yields vary across different bond maturities and is used to understand the expectations of investors regarding future interest rate movements. Therefore, the correct option is (a) - the U.S. Treasury yield curve shows the relationship among bonds' risk characteristics with different maturities.

Step-by-step explanation:

The U.S. Treasury yield curve shows the relationship between the risk characteristics of bonds with different maturities. It reflects how yields vary across different bond maturities and is used to understand the expectations of investors regarding future interest rate movements. The shape of the yield curve can provide insights into the overall health of the economy and can have implications for investment decisions.

For example, when the yield curve is upward sloping, with longer-term bonds having higher yields than shorter-term bonds, it suggests that investors expect higher future interest rates. Conversely, when the yield curve is downward sloping, with shorter-term bonds having higher yields, it indicates a potential economic slowdown or recession.

Therefore, the correct option is U.S. Treasury yield curve shows the relationship among bonds' risk characteristics with different maturities.