Which One of the Following Statements Is Correct

Which one of the following statements is correct?

A) The yield curve relates time to maturity to interest rates on zero coupon bonds.
B) The yield curve is based on Treasury bill yields.
C) The term structure of interest rates is based on default-free, pure discount securities.
D) The term structure of interest rates is based on default-free, coupon bonds.
E) The yield curve ignores default risk while the term structure includes a default risk premium.

Correct Answer:

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