Scribd
Upload
67 views4 pages

Yield Curve: Courses Offered: Rbi Grade B Sebi Grade A Nabard Grade A and B Ugc Net Paper 1 and 2

The document discusses the yield curve, which plots the interest rates of bonds with equal credit quality but differing maturity dates. It describes the three main types of yield curves: normal, flat, and inverted. A normal yield curve reflects a stable economy, a flat curve reflects uncertainty, and an inverted curve often predicts recession as short-term rates exceed long-term ones. The yield curve provides insights into current and future economic conditions from the bond market's perspective.

Uploaded by

Vaishali Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
67 views4 pages

Yield Curve: Courses Offered: Rbi Grade B Sebi Grade A Nabard Grade A and B Ugc Net Paper 1 and 2

The document discusses the yield curve, which plots the interest rates of bonds with equal credit quality but differing maturity dates. It describes the three main types of yield curves: normal, flat, and inverted. A normal yield curve reflects a stable economy, a flat curve reflects uncertainty, and an inverted curve often predicts recession as short-term rates exceed long-term ones. The yield curve provides insights into current and future economic conditions from the bond market's perspective.

Uploaded by

Vaishali Singh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

BEST UNDERSTOOD WHEN COVERED

ALONG WITH THE VIDEOS ON BASICS OF


FOREIGN EXCHANGE MARKET

YIELD CURVE LOG ON TO WWW.ANUJJINDAL.IN


[email protected]
9999466225
WWW.ANUJJINDAL.IN

COURSES OFFERED:

RBI GRADE B
SEBI GRADE A
NABARD GRADE A AND B
UGC NET PAPER 1 AND 2
YIELD CURVE

• Yield curve shows the relation between the interest rate (cost of borrowing) and the
time to maturity. It is a line that plots yields (interest rates) of bonds having equal
credit quality but differing maturity dates.
• It is a way to measure bond investors’ feelings about risk, and can have a
tremendous impact on the returns.
• Yield curve is generally indicative of future interest rates, which are indicative of an
economy’s expansion or contraction.
• Yield curve and changes in yield curve can convey a great deal of information.

TYPES OF YIELD CURVE

• Normal yield curve


• Flat yield curve
• Inverted yield curve

• THE NORMAL YIELD CURVE:


In which longer maturity bonds have a higher yield compared with shorter-term
bonds due to the risks associated with time.

Analysis: Most common and generally reflects a stable and expanding economy. Relative
steepness of normal yield curve can provide clues about the current and expected pace of
economic activity.

1
YIELD CURVE

• THE FLAT YIELD CURVE:


It is characterized by similar yields across both short-term and long-term maturities.
It reflects uncertain economic conditions.

Analysis: A flat yield curve may arise from normal or inverted curve, depending on changing
economic conditions.

• THE INVERTED YIELD CURVE:


It results when short-term yields are higher than longer-term yields.

Analysis: Generally, reflects periods of significant economic slowdown and often recession.

2
YIELD CURVE

• Yield curve is used to determine the current and future strength of the economy.

• The yield curve has historically reflected the market’s sense of the economy.

• Yield curve can predict the investing pattern of the investors.

OUR COURSES
Click ON IMAGE/LINK TO KNOW MORE

You might also like