Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
What is meant by the risk structure of interest rates?
Expert Solution
Step 1: risk structure of interest rates
The term "risk structure of interest rates," often referred to as the "yield curve," refers to the relationship between interest rates and the maturity (time to maturity) of fixed-income securities, such as government bonds or corporate bonds. It describes how interest rates vary across different maturities and provides insights into the market's perception of risk and future economic conditions.
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