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The Term Structure of Interest Rates

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

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Solution Summary

This 346 word response contains four quality references. These references tie term structure of interest rates together with the three facts associated with these rates. In addition, the three theories surrounding these rates are explored.

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What is the term structure of interest rates, and its three facts?
Term Structure of Interest Rates are correlated to expectations of market participants relevant to yield (Term structure of interest rates, 2014). This concept is also known as the yield curve, and it is important to economic development. The yield curve allows economists to understand future interest rates, inflation rates, and business cycles (The risk and term structure of interest rates, 2011).

Three Facts of Term Structure of Interest Rates
First, the interest rates of different maturities tend to move together (The risk and term structure of interest rates, 2011). Secondly, ...

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