The Yield Curve and the Term Structure

Reading the curve

Shapes and their signals

Shifts, twists, and bond prices

Expectations arithmetic in brief

In fixed income markets, what relationship does the yield curve plot for bonds of the same credit quality?

Why do normal yield curves slope upward, with long yields above short yields?

What does an inverted yield curve most directly tell market watchers?

Under the pure expectations hypothesis, if expected one-year rates for the next three years are 3, 4, and 5 percent, where should the three-year yield sit?

A central bank tightens, lifting short yields one percent while long yields rise only slightly. What kind of curve movement is this, and what does it do to a ten-year bond?

Why do bond portfolios report their duration as a summary statistic?

What one-word term names a yield curve with long yields below short yields? Answer in lowercase.

What two-word term names the extra yield lenders demand for long commitments beyond expected short rates? Answer in lowercase.

What two-word hypothesis says long yields equal the average of expected future short rates? Answer in lowercase.

What two-word term describes a curve shift that moves all yields up or down by roughly the same amount? Answer in lowercase.