Q&A: Bond yield curves

Q. What is the yield curve? A. It is a graph that plots the yield on a particular bond against the term to maturity and for one particular issuer. So, for example, if you take the UK gilt market, the UK government is the issuer and it has got many different bonds at different maturities, ranging from just a few months to 50 years, and there are all different yields. The yield curve plots a line through all of those different yields. If you take the UK, for example, at the moment, it is an upward-sloping yield curve. It is a classic textbook-shaped yield curve. It will start yields at ...