Bonds & Yield Curve – Back to School


Yield Curve also called Term Structure of Interest Rates for a bond issuer, the structure of yields for bonds with different terms to maturity (but no other differences) is called Term Structure of Interest Rates.

The relationship between and yield on a similar risk class of securities is called the Yield Curve. The relationship represents the time value of money  showing that people would demand a positive rate of return on the money they are willing to part today for a payback into the future. It also shows that a Rupee payable in the future is worth less today because of the relationship between time and money. A yield curve can be positive, neutral or flat. Continue reading “Bonds & Yield Curve – Back to School”