Yield Curve – What is a Yield Curve?

What is a Yield Curve?

Definition of Yield Curve: It is a graphical link between the rate of interest, cost and borrowing and the maturity time of the liability for a provided borrower in a currency. Generally, several traders follow the interest rate of US Dollar to be paid on the Treasury Securities of US for different maturities. Commonly, the data which is presented in the form of graph is made for producing “yield curve.” The analysts focus mainly on the alterations in the arc shape with time and generally refer to the outlines in the data as the structure of the rate of interest. The Yield curves can be made for other types of debt to see the cost trends in market and to acquire several other pointers of the recent economic condition. The yield curves are generally an upward slope like the longer will be the maturity; the yield will be higher with a flattening of the arc as one starts moving towards high maturity level.