Understanding the Bootstrapping Method for Yield Curve Construction

In the context of fixed income securities, yield curves serve as vital tools for investors to assess the relationship between interest rates and the maturities of various bonds. Investors use these curves to gauge future interest rate movements, economic conditions, and to make informed investment decisions. The construction of a yield curve can be achieved through several methods, including the bootstrapping method.

Which of the following statements best describes the bootstrapping method used in yield curve construction?