Question

It is often the case that the yield curve inverts and portends a recession in the United States of America: however, which of the following is not true with respect to the yield curve? (Select all that are true, could be more than one)

a. The yield curve always correctly predicts a recession in the case of inversion---it has never been wrong.

b. The yield curve can be used to infer changes in risk appetities of investors as long- and short- term rates shift.

c. The yield curve shows the yield of a fund of bonds for the largest 500 companies in the United States, much like the S&P 500 is an index for the stocks of the largest 500 companies in the United States

d. The yield curve shows yields on various maturities of US treasuries organized with increasing maturity on the x-axis, and yields (return) of those treasuries on the y-axis

Answer 1

The yield curve shows yields on various maturities of US treasuries organized with increasing maturity on the x-axis, and yields (return) of those treasuries on the y-axis

The yield curve can be used to infer changes in risk appetities of investors as long- and short- term rates shift.

These statements are correct

On x axis of yield curve, bonds with differing maturity are plotted and on y axis corresponding rates for those bonds are plotted.