Term Structure of Interest Rates

In this survey, firstly I describe the fundamentals of interest rates and yield curves. After required background information for the term structure is established, I move on the main subject of this survey: Term Structure of Interest Rates. We can define the term structure of interest rates as calculation of the relation between the yields on default-free securities which only differ in their term to maturity. This relationship has several determinants, such as interest rates and yield curves, which are always concerned by economics to establish the term structure. Investors and economists strongly believe that the shape of the yield curve reflects the conditions for monetary policy and the market's future expectation for interest rates. In other words, term structure is important for us because it integrates the market's anticipations of future events by offering a complete schedule of interest rates across time. Thus, the understanding of the explanation of the term structure gives us a way to extract this information and to predict how changes in the underlying variables will affect the yield curve. The novel contributions are: first, that in a stratified context of the fundamentals provides the basis of term structure of interest rates in the names of interest rates and yield curves; second, empirical evidences gives the background information for understanding this important concept; third, important theories of the term structure which will be important when measuring the term structure; fourth, term structure models to understand the measurement of the term structure. I believe that this stratified content of the survey will improve the understanding of the readers about the term