Question

What does a yield curve show?

1) The relationship between interest rates and time to maturity on a particular day
2) The relationship between stock prices and time to maturity on a particular day
3) The relationship between inflation rates and time to maturity on a particular day
4) The relationship between exchange rates and time to maturity on a particular day

Answer 1

A yield curve shows the relationship between interest rates and time to maturity on a particular day.

Step-by-step explanation:

A yield curve shows the relationship between interest rates and time to maturity on a particular day. It is a line graph that plots the interest rates of bonds with different maturities. The yield curve can provide insights into the expectations of investors regarding future economic conditions and interest rates.