Date: June 25th, 2007

The risk curve

25 June, 2007 (09:02) | Finance, Primer Posts | 14 comments

Just as we have a yield curve, finance recognizes a risk curve.

The yield curve is a two-dimensional representation of the market’s tolerance of long-term debt investments, with maturity as the horizontal axis, and interest rate as the vertical.
 

As maturity lengthens, interest rates should be higher
 
In a ‘normal’ world, the longer a loan’s maturity, the higher […]