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Describe what a yield curve is.

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Describe what a yield curve is. thank a lot 更新: 謝謝你的解答. 但我想要全英文! thank a lot

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In finance, the yield curve is the relation between the interest rate (or cost of borrowing) and the time to maturity of the debt for a given borrower in a given currency. For example, the current U.S. dollar interest rates paid on U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called "the yield curve." More formal mathematical descriptions of this relation are often called the term structure of interest rates. The yield of a debt instrument is the annualized percentage increase in the value of the investment. For instance, a bank account that pays an interest rate of 4% per year has a 4% yield. In general the percentage per year that can be earned is dependent on the length of time that the money is invested. For example, a bank may offer a "savings rate" higher than the normal checking account rate if the customer is prepared to leave money untouched for five years. Investing for a period of time t gives a yield Y(t). This function Y is called the yield curve, and it is often, but not always, an increasing function of t. Yield curves are used by fixed income analysts, who analyze bonds and related securities, to understand conditions in financial markets and to seek trading opportunities. Economists use the curves to understand economic conditions. The yield curve function Y is actually only known with certainty for a few specific maturity dates, the other maturities are calculated by interpolation

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茲息率曲線 一條線,y是息率,x是時間.透過一條線表示出息率的走勢 線可以向上,向下,橫行 一般用以下三種理論解釋 Pure Expectations theory--線的反映,只是投資者對未來息率的走勢預測 Liquidity preference theory--長線的息率,會比短線高一點 Market segmentation theory--長短息率不一樣,只是需求問題,那時期資金需求大,那時期的 線會高
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