I get the assumption that investors demand higher interest rates for longer durations, which is why so many of the spot/forward examples assume a rising curve.
But if that’s true, why are there some questions where the curves slope downward?
I get the assumption that investors demand higher interest rates for longer durations, which is why so many of the spot/forward examples assume a rising curve.
But if that’s true, why are there some questions where the curves slope downward?
Some issuers want to issue short-term bonds.
If investors want long-term bonds, the yield on short-term bonds must increase to induce investors to buy them.