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Term Structure Of Interest Rates

A yield curve displaying the relationship between spot rates of zero-coupon securities and their term to maturity.
Term Structure Of Interest Rates
|||The resulting curve allows an interest rate pattern to be determined, which can then be used to discount cash flows appropriately. Unfortunately, most bonds carry coupons, so the term structure must be determined using the prices of these securities. Term structures are continuously changing, and though the resulting yield curve is usually normal, it can also be flat or inverted.

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