A Curve That Never Changes Direction Is Called An) ________

question 1

Multiple Choice

A curve that never changes direction is called an) ________ curve.

• A) monotonic
• B) nonmonotonic
• C) U-shaped
• D) inverted

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Definitions:

Yield Curve

A graph showing the relationship between bond yields and their maturity dates, commonly used to predict economic changes.

Price Volatility

Refers to the degree of variation in the price of a financial instrument over time, indicating the risk or uncertainty of its value change.

Coupon Bond

A debt security that pays interest to the holder on a regular basis until its maturity, when the principal is also repaid.

Maturity

The date when a financial instrument (e.g., bond, loan) reaches its final installment and is to be paid off completely.