271224
Description
Note by Nafisa Zahra, updated more than 1 year ago
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Created by Nafisa Zahra
over 10 years ago
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Page 1
Yield curve- plotting the yield to maturity against the time to maturity. The pure yield curve describes the relationship between YTM and time to maturity for zero coupon treasuries
The forward rate is an 'estimate' of the future short rate in year t.
Assuming interest rate certainty an investor will expect the same payoff investing in a 1-year bond and investing in a 2 year bond and selling after 1 year.
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