Influencing Factors of the Yield Curve

Very Easy Term Structure Dynamics Yield Curve Construction

Understanding how the yield curve is constructed is essential for analyzing fixed income securities. The yield curve illustrates the relationship between interest rates and different maturity dates for debt securities.

Which of the following is a primary factor that influences the shape of the yield curve?

The credit risk associated with bonds.

Expectations of future interest rates.

The liquidity of the security.

Hint

Submitted6.2K

Correct4.9K

% Correct78%