ACTSC371 Study Guide - Final Guide: Liquidity Premium, Liquidity Risk, Cash Flow
5 Oct 2018
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Chapter 13 the term structure of interest rates. If one considers a set of ,000 zero coupon bonds, one would expect to see the different yields to maturity offered by each. Recall the price = pv of ,000 at the yield to maturity (compounded annually). In this case, one can see that the _____________ the maturity, the _____________ the yield. Historically, this has been the usual case in canada and makes sense the risk of default is ________________________ than it is for shorter maturities so ____________________________________________. The _______________ is a graph that displays the relationship between the yield to maturity (y-axis) and the time to maturity (x-axis). It is typically ____________ sloping, as it would be for the above table of rates, but it can also be _______________ As rates change, so does the yield curve. y t i r u t a. For coupon bonds, note that there is ______________________ for investors.
