Yield Curves

A yield curve is a line that plots the interest rates, at a set point in time, of bonds having equal credit quality but

differing maturity dates.

The shape of the yield curve gives an idea of future interest rate changes and economic activity. An inverted yield

curve is often a harbinger of recession. A positively sloped yield curve is often a harbinger of inflationary growth.

The information content of a yield curve reflects the asset pricing process on financial markets. When

buying and selling bonds, investors include their expectations of future inflation, real interest rates

and their assessment of risks. An investor calculates the price of a bond by discounting the expected

future cash flows.

The course covers key features of yield curves

To provide the audience the basic understanding of yield curves and how they can be constructed

Yield Curves: purpose, shapes, types

Yield Curves Construction