Economics Risk And Return Questions
The term structure of interest rates refers to the relationship between the interest rates and the time to maturity of debt securities. It shows how interest rates vary across different maturities, such as short-term, medium-term, and long-term. The term structure is typically depicted through a yield curve, which plots the interest rates against the time to maturity. This curve helps investors and policymakers understand the expectations and risks associated with different time horizons for borrowing or lending money.