Primary navigation:

QFINANCE Quick Links
QFINANCE Reference

Home > QFINANCE Dictionary > Definition of yield curve

Definition of

yield curve

Stockholding & Investments

graph showing comparable interest on bonds a visual representation of relative interest rates of short- and long-term bonds. It can be normal, flat, or inverted.

Recommended Further Reading (Term count)
  • The Insurance Sector: Plenty of Silver Lining to Be Found
    by Andrew Milligan
    If one looks at the devastation wrought on the global finance community, there is no doubt that the insurance sector has come out of this in very much better shape than the banks. There have been casualties—AIG in the United States, for example. However, AIG was a special case, being much more of a financial conglomerate than a “pure” insurance company.The reasons why the insurance sector has been less affected by the financial services...
  • Steering Between Deflation and Inflation—A Troubled Road for Developed Economies
    by Neil Williams
    The primary view that seems to be dominating the developed economies as we go into the last quarter of 2010 is that central banks and governments should play a “loose for longer” game, which means avoiding raising interest rates and avoiding tightening fiscal policy. Their motive for staying loose is to fight deflationary pressures in the economy. No one wants to see another major economy going down the route that took Japan into its two lost...
  • Portfolio Analysis: Duration, Convexity, and Immunization
    Duration is a measure of how sensitive the price of bonds are to changes in interest rates (otherwise known as interest rate risk). For example, if interest rates rise 1%, a bond with a two-year duration will fall about 2% in value. Convexity is a measure of how prices rise when yields fall, and can also be used to measure interest rate risk.
  • Term Structure of Interest Rates
    A mathematical description of the relationship between interest rates (or the cost of borrowing) and the time to maturity of a debt in a given currency, often used in relation to fixed securities. The resulting relationship is plotted on a graph that is known as a “yield curve.” This curve can then be analyzed to measure the expected yield of securities over time.

Definitions of ’yield curve’ and meaning of ’yield curve’ are from the book publication, QFINANCE – The Ultimate Resource, © 2009 Bloomsbury Information Ltd. Find definitions for ’yield curve’ and other financial terms with our online QFINANCE Financial Dictionary.

Back to top