A company sells callable bonds for flexibility. Current yield . It is calculated by dividing the bond's coupon by current price. A bond's yield falls when its price rises. The yield curve shows yields for bonds of varying maturities, from three months to 30 years in the case of U.S. Treasuries.
Yields are higher with longer terms to compensate investors for tying up their money longer.
This is called a normal yield curve . An inverted yield curve often signals that interest rates are reaching their peak, which leads investors to favor longer-term bonds to lock in the extra yield. For a view of the yield curve and its change in the past two days, see the U.S. Treasuries page at Bloomberg's Web site. Investors worldwide hold trillions of dollars of Treasuries, making it the most liquid bond for buying and selling. The no-default guarantee of the U.S. Treasury also helps to make them the benchmark bond for valuing other categories of bonds.