A yield curve is a graph that shows how yields on similar fixed income securities change..

It does this by plotting the yield on securities with different maturities and then connecting them using a line. Usually the resulting “curve” for say UK gilts slopes upwards from left to right – shorter dated bonds having lower yields than longer dated – because investors expect a higher yield for taking greater investment risk by investing with the UK government over the long-term rather than the short-term.

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