Multiple choice

Yield curve is a graph that shows

  1. yields of various equities of various firms

  2. yields from mutual funds

  3. yields of various bonds of various maturities using one set of bonds such as Govt. security

  4. none of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A yield curve plots bond yields against their time to maturity, showing how interest rates vary across different terms. Government securities are typically used because they are risk-free and have consistent credit quality. Option C correctly describes this fundamental fixed-income concept.

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