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3 May, 04:45

For a given class of similar-risk securities, what does each of the following yield curves reflect about interest rates: (a) downward sloping, (b) upward sloping, and (c) flat?

What is the "normal" shape of the yield curve?

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  1. 3 May, 07:49
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    The slope of the yield curves predicts future interest rate changes and economic activity.

    Explanation:

    a) The Upward Sloping Curves indicates yields on longer-term bonds may continue to rise, predicting an economic expansion.

    b) The downward sloping curves suggests yields on longer term bonds may continue to fall, predicting an economic recession.

    c) The flat yield curve arise from normal or inverted yield curve and is in transitioning from recession to recovery.

    The upward sloping curve is the normal shape of the yield curve
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Home » Business » For a given class of similar-risk securities, what does each of the following yield curves reflect about interest rates: (a) downward sloping, (b) upward sloping, and (c) flat? What is the "normal" shape of the yield curve?
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