Groundlearn / Glossary / Yield curve
Yield curve
A CFA and FRM term, defined in plain English with the distinction examiners test.
What it means
The relationship between yield and maturity for bonds of the same credit quality.
The exam angle
Inversion — short rates above long — has preceded most recent recessions and is treated as a leading indicator rather than a cause.
Where it appears in the syllabus
- EconomicsCFA Level I · exam weight 6–9% · Market structures, business cycles, policy, trade and exchange rates.
- Fixed IncomeCFA Level I · exam weight 11–14% · Pricing, yield measures, duration, convexity, credit spreads.
- Valuation & Risk ModelsFRM Part I · exam weight 30% · VaR and ES, option valuation, bond risk, stress testing, credit and op risk.
Related terms
- Interest rate parityThe condition that the forward exchange rate differs from the spot rate by exactly the interest rate differential, so…
- Adverse selectionThe problem that arises when the party with better information self-selects into a transaction, leaving the…
- Business cycleThe recurring pattern of expansion, peak, contraction and trough in economic activity.
- Core inflationInflation excluding food and energy prices, which are volatile and often driven by supply rather than demand.
- Fiscal policyGovernment use of spending and taxation to influence aggregate demand.
- Gross domestic productThe market value of all final goods and services produced within a country in a period.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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