Final answer:
The term structure of interest rates, or yield curve, shows the relationship between bond yields and maturity dates, not the specific schedule of a company's bond maturities and interest payments. It is a graphical tool representing how much return investors demand for bonds over different time periods with corporate bonds offering higher yields than government bonds due to higher risk.
Step-by-step explanation:
The term "term structure of interest rates" does not specifically refer to when a company's bonds mature or the dollar amount of interest payments a firm must pay.
Rather, the term structure of interest rates, also known as the yield curve, represents the relationship between the interest rates and the maturity dates of debt securities such as bonds. It is a graphical representation showing the yield on bonds of varying maturities, reflecting how much return investors demand for committing their capital over different time periods. As the interest rate environment changes, it impacts the value of bonds, making them more or less attractive to investors. Corporate bonds typically offer a higher yield to compensate for higher risk as compared with government securities like U.S. Treasury bonds.