In
finance, the
yield curve is a curve showing several yields or interest rates across different contract lengths (2 month, 2 year, 20 year, etc...) for a similar debt contract. The curve shows the relation between the (level of)
interest rate (or cost of borrowing) and the time to
maturity, known as the "
term", of the debt for a given borrower in a given
currency. For example, the
U.S. dollar interest rates paid on
U.S. Treasury securities for various maturities are closely watched by many traders, and are commonly plotted on a graph such as the one on the right which is informally called "the yield curve". More formal mathematical descriptions of this relation are often called the
term structure of interest rates.