Question

Figure 7 shows a number of yield curves at various points in time. Go to http://www.bloomberg.com/ markets/rates/index.html and find the data for U.S. Treasury yields for different maturities. Does the current yield curve fall above or below the most recent one listed in Figure 7? Is the current yield curve flatter or steeper than the most recent one reported in Figure 7?

Short answer

An upward sloping steeper yield curve represents the short-term interest rate will increase quickly in the future.

Step-by-step solution

Definition

Yield curve is a graph that is plotted with the fixed-interest securities against the time it takes to mature.

Explanation

The values are taken from the Bloomberg database and the graph is generated.

Yield curve:

The current yield rate falls above the recent yield. The current yield is steeper than the recent yield.