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Term structure of interest rates and its three facts.

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What is the term structure of interest rates, and what are its three facts?

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The term structure of interest rates, which is also sometimes called the yield curve, is a graph that plots the yields of similar-quality bonds against their maturities, from shortest to longest. This graph shows the different yields that are currently being offered on bonds with various maturities, which allow investors to quickly and easily compare the ...

Solution Summary

The solution for this problem includes a detailed explanation of term structure of interest rates, the three possible shapes of the graph curve and what each one means as it relates to interest rates. The solution is comprised of 228 words of text.