Question

The Treasury yield curve plots the yields on Treasury notes and bonds relative to the ____ of those securities.

1) face value
2) market price
3) maturity
4) coupon rate
5) issue date

Answer 1

The Treasury yield curve compares bond yields to their maturity dates, not current market prices or coupon rates. It visually represents the correlation of yields with time until bonds are due to be repaid. Option 3.

Step-by-step explanation:

The Treasury yield curve plots the yields on Treasury notes and bonds relative to their maturity(3). The yield curve graphically represents the relationships between the bond yields and their respective times to maturity. Bonds typically consist of a face value, which is the amount the issuer pays the bondholder upon maturity; a coupon rate, which is the periodic interest payment issued to the bondholder; and the maturity date, which is when the bond's face value and final interest payment are due to be paid. The market price of a bond can fluctuate based on current market interest rates, but the yield curve focuses on how the yield changes with different maturities of bonds, not their current market prices or coupon rates.