Markets · 6 pages · 12 min
How the yield curve is a set of rates by maturity
The yield curve lists a rate for each maturity, so the market has many rates rather than one.
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From the opening
A yield curve is the set of interest rates that the same kind of borrower pays, or the same kind of bond yields, at different maturities on one date. The short end is the rate for a near repayment, and the long end is the rate for money that stays out for many years. The opening covers rates listed by maturity, slope is the gap, and forwards sit between points.
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Inside
- Rates listed by maturity
- Slope is the gap
- Forwards sit between points
- One rate hides the shape
- Where the idea stops applying
- A distinction worth keeping
Sources
- Term structure of interest rates
- Bond yield by maturity