Normal Yield Curve
A normal yield curve is an upward-sloping term structure in which longer-maturity yields exceed shorter-maturity yields for bonds of similar credit quality. It reflects higher compensation for locking in funds over longer time horizons.
Example: Currently, the 1-year yield is 4.0%, the 5-year yield is 4.5%, and the 10-year yield is 4.8%, illustrating a typical upward-sloping normal curve.
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