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Which of the following is NOT true: None of these. Yields on long-term bonds are always higher than short-term bonds. The yield curve charts the
Which of the following is NOT true:
None of these. | ||
Yields on long-term bonds are always higher than short-term bonds. | ||
The yield curve charts the annual interest rates paid on bonds of various maturities. | ||
Yields on longer-term bonds tend to be higher than yields on short-term bonds, principally stemming from inflation which erodes the value of fixed payments. | ||
When short-term interest rates rise above long-term interest rates, investors say the yield curve is inverted. |
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