Briefly outline each of the three theories for describing the shape of the term structure of interest rates (the yield curve) and discuss these theories with your classmates. Use examples if necessary. The shape of the yield curve has two major theories, one of which has three variations.Briefly outline each of the three theories for describing the shape of the term structure of interest rates (the yield curve) and discuss these theories with your classmates. Use examples if necessary. The shape of the yield curve has two major theories, one of which has three variations.