Criteria for Term Structure Theories The goal of a term structure theory is to explain – Why interest rates on bonds of different maturities move together – When short-term interest rates are low, yield curves are more likely to have an upwards slope; when short term rates are high, yield curves are more likely to have a downwards slope and be inverted.
{"Image DocumentName": "Yield Curve and Term Structure", "Image ImageDescription": "Yield Curve \u2013 a collection of yields to maturity on bonds with differing maturities but the same risk, liquidity and tax considerations. Term Structure \u2013 the relationship between the different yields to maturity for a given yield curve.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}