Term structure of interest rates

Definition:

Relationship between interest rates on bonds of different maturities, usually depicted in the form of a graph often called a yield curve. Harvey shows that inverted term structures (long rates below short rates) have preceded every recession over the past 30 years.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Fully depreciated

An asset that has already been charged with the maximum amount of depreciation allowed by the IRS for accounting purposes.

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