3 ms·
Still baffled that this is called a curve
by buboard 7y ago
Still baffled that this is called a curve
- soVeryTired 7y agoAny continuous locus of points is a curve - that's what makes the Jordan Curve Theorem hard to prove :) On a more serious note, the graph displayed in the article is a timeseries of the difference between two points on the curve. The actual curve looks something like this: https://en.wikipedia.org/wiki/Yield_curve#/media/File:Yield_curve_20180513.png https://en.wikipedia.org/wiki/Yield_curve#/media/File:Yield_...
- buboard 7y agoisn't that discontinuous?
- soVeryTired 7y agoQuips about the Jordan curve theorem aside, I don't think that's really a meaningful question. It is or it isn't, depending on how you want to model it. Yield curves are bootstrapped from known bond yields at liquidly-traded tenors (1Y, 2Y, 5Y, 10Y, and short-dated). Those are the heavy black dots in the image. Outside of those tenors the 'true' rate is anyone's guess: you're basically interpolating. Whether that interpolation is continuous is up to you!
- deleted 7y ago[deleted]
- kasey_junk 7y agoThe 2/10 relationship is not the curve. The curve comes from the traditional visualization of all the yield/term points at any given time. A curve is a pretty normal way to visualize a bunch of Cartesian points at once.
- alex_young 7y agohttps://s3.amazonaws.com/gurufocus_charts/yieldChart_curve_chart_top_container.png https://s3.amazonaws.com/gurufocus_charts/yieldChart_curve_c...
- semi-extrinsic 7y agoPeople talk about the 2/10 and say "the curve is inverted", exactly like you can measure the position of just the tip and tail of an airplane and say "it's going up/down".