Understanding the Term Structure of Interest Rates

When evaluating fixed income investments, understanding the term structure of interest rates is crucial. The term structure of interest rates refers to the relationship between interest rates and the time to maturity of debt instruments. It is often depicted in the form of a yield curve, which plots the yields of bonds with equal credit quality but differing maturities.

Consider the following scenario: A bond investor is analyzing various bonds with different maturities and their respective yields are as follows: 2-year bond has a yield of 2%, 5-year bond has a yield of 3%, and a 10-year bond has a yield of 4%. Based on this information, what might be concluded about the term structure of interest rates?