SIE Exam Question 121: Answer and Explanation

Question: 121

What is the graph called that represents the relationship between a bond's term to maturity and its yield at a given point in time?

• A. Efficient frontier
• B. Point and figure chart
• C. Yield curve
• D. Bar chart

Correct Answer: C

Explanation:

The yield curve is the graph that represents the relationship between a bond's term to maturity and its yield at a given point in time. The efficient frontier is the upper limit of how much growth a portfolio can expect to see given its level of acceptable risk. A point-and-figure chart plots price movement without looking at time. Bar charts show multiple prices over time.