is an example of US Treasury yields for various maturities:
6 month: 2.25%
1 year: 2.37%
2 year: 3.15%
5 year: 5.02%
10 year: 5.24%
The curve indicated by these yields is called _____.
The correct answer is b.
A normal yield curve chart shows long-term debt instruments having higher yields than short-term debt instruments. Sometimes referred to as positive yield curve. The reason it is "normal" is because you would expect slightly more risk for holding a bond for a longer period of time because there is great risk of default.
An inverted yield curve is when long-term debt instruments that have lower yields than short-term debt instruments.
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The correct answer is a. An inverted—or negative—yield curve is an unusual situation that generally indicates an unhealthy ...
A yield curve in which short-term debt instruments have a lower ...
An interest rate environment in which long-term debt instruments ...
The relationship between interest rates or bond yields and different ...
A line that plots the interest rates, at a set point in time, ...
The risk of experiencing an adverse shift in market interest ...
A relatively rare type of yield curve that results when the interest ...