The higher the risk of a security the higher its expected

Last updated: 6/15/2023

The higher the risk of a security the higher its expected return will be A bond s risk level is reflected in its yield but understanding the different risks involved when investing in bonds is important The following graph shows the relationship between interest rates and maturity for three security classes US Treasury securities USTS AA rated corporate bonds and BBB rated corporate bonds Use the selection dropdown lists to correctly associate each curve with its corresponding security class YIELD 15 12 9 6 3 0 5 10 15 20 25 30 YEARS TO MATURITY A B C