Yield Curve Risk

Bonds Fixed Income Financial Terms Dictionary

Contents

The yield curve is a graphical illustration of the relationship between interest rates and bond yields with different maturities.

Yield curve risk is the risk that changes in interest rates will affect fixed income securities.
Changes in the yield curve are based on bond risk premiums and expectations of future interest rates.
Interest rates and bond prices are inversely related, in which prices fall when interest rates rise and vice versa.