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24 Apr, 2018

What Does an Inverted Yield Curve Mean?

By |2018-04-24T06:10:21+10:00Apr 24, 2018|Education|

Normally, fixed-income securities with a longer maturity date provide a risk premium for investors when compared to shorter-dated securities, reflecting the increased complexity inherent in their risk profiles (mainly interest rate risk and sometimes extension risk) over a longer investment horizon. This is best shown with a very familiar, upwardly sloping yield curve (Figure 1). Here, the swap curve increases [...]