GK
BANKING AWARENESS AND SEBI
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Yield curve changes its slope and shape from time to time
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It is a line of graph plotting the yield of all maturities of a particular instrument
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Yield curve can be twisted to the desired direction through the intervention of RBI
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All of the above
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Detailed explanation-1: -What Is the Yield Curve Risk? The yield curve risk is the risk of experiencing an adverse shift in market interest rates associated with investing in a fixed income instrument. When market yields change, this will impact the price of a fixed-income instrument.
Detailed explanation-2: -Yield curve risk is the threat that interest rates change on a fixed-income asset such as a bond, which affects its rate of return. There is a strong correlation between U.S. Treasury bond yield curves and economic growth, so investors pay particular attention to them.
Detailed explanation-3: -The yield curve allows fixed-income investors to compare similar Treasury investments with different maturity dates as a means to balance risk and reward. Additionally, investors use its shape to help forecast interest rates.
Detailed explanation-4: -The yield curve is an important economic indicator because it is: central to the transmission of monetary policy. a source of information about investors’ expectations for future interest rates, economic growth and inflation. a determinant of the profitability of banks.