The yield curve may take four general shapes:
(1) upward-sloping
(2) flat
(3) downward-sloping
(4) variable
The upward yield curve is the most common, as longer terms generally have higher yields. This is because investors demand a liquidity premium for the greater risk associated with a long-term investment.
The downward yield curve is called an “inverted” yield curve. An inverted yield curve means short-term financial instruments have a higher yield than long-term instruments. The inverted yield curve doesn’t occur frequently, and it has historically preceded recessions.
A flat yield curve means there is little to no difference in yields between short-term and long-term financial instruments.
A variable yield curve can take many different shapes.
—
Edspira is the creation of Michael McLaughlin, an award-winning professor who went from teenage homelessness to a PhD. Edspira’s mission is to make a high-quality business education accessible to all people.
—
SUBSCRIBE FOR FREE PDF GUIDES TO THE FINANCIAL STATEMENTS, MANAGERIAL ACCOUNTING, TAX, AND MORE
* http://eepurl.com/dIaa5z
—
HIRE MICHAEL MCLAUGHLIN, PHD, CPA
* https://michaelmclaughlin.com/hire-me
—
GET CERTIFIED IN FINANCIAL STATEMENT ANALYSIS, IFRS 16, AND ASSET-LIABILITY MANAGEMENT
* https://edspira.thinkific.com
—
LISTEN TO THE SCHEME PODCAST
* Apple Podcasts: https://podcasts.apple.com/us/podcast/scheme/id1522352725
* Spotify: https://open.spotify.com/show/4WaNTqVFxISHlgcSWNT1kc
* Website: https://www.edspira.com/podcast-2/
—
GET TAX TIPS ON TIKTOK
* https://www.tiktok.com/@prof_mclaughlin
—
ACCESS INDEX OF VIDEOS
* https://www.edspira.com/index
—
CONNECT WITH EDSPIRA
* Facebook: https://www.facebook.com/Edspira
* Instagram: https://www.instagram.com/edspiradotcom
* LinkedIn: https://www.linkedin.com/company/edspira
—
CONNECT WITH MICHAEL
* Twitter: https://www.twitter.com/Prof_McLaughlin
* LinkedIn: https://www.linkedin.com/in/prof-michael-mclaughlin
—
ABOUT EDSPIRA AND ITS CREATOR
* https://www.edspira.com/about/
![How to Start an Indian Restaurant Business [Video]](https://video.ednadigitalmarketing.com/wp-content/uploads/2024/03/mp_22065_0_0jpg.jpg)
![Introduction to Financial Literacy: Build Your Financial Foundation | Wallstreetmojo [Video]](https://video.ednadigitalmarketing.com/wp-content/uploads/2024/11/mp_26557_0_0jpg.jpg)
![Top 50 Customer Service Tips | How To Give Great Customer Service [Video]](https://video.ednadigitalmarketing.com/wp-content/uploads/2024/01/mp_20116_0_0jpg.jpg)
![Inspiring Short Stories | Seeking Happiness | Motivational & Inspirational Video [Video]](https://video.ednadigitalmarketing.com/wp-content/uploads/2022/02/mp_8764_0_0jpg.jpg)