interest rate</strong></a> per year, and the maturity rates are all depicted by the yield curve.</p>\n<p>The form of the curve is controlled by the current level of interest rates in the economy. Lower interest rates are connected with an increase in the amount of longer-term debt instruments. Higher interest rates are correlated with lower levels of longer-term debt instruments.&nbsp;</p>\n<p>In regards to that, the yield curve is a graphical representation of the rates of return that investors may anticipate from different maturities of fixed-income assets such as bonds and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-treasury-bills-t-bills/">treasury bills</strong></a>. The<strong> form of the curve is controlled by the current level of interest rates in the economy.</strong></p>\n<p>As a result, while classic, normal curves represent economic growth, downward sloping curves indicate an economic decline.</p>\n<h3>How Yield Curves are Measured?</h3>\n<p>One of the most common methods of measuring yield curves and determining whether they are smoothed is the spread between 10-year and 2-year Treasuries. The Federal Reserve charts this dispersion, and it is one of the most extensively downloaded series of data. Besides, it is constantly refreshed.</p>\n<p>Since 1979, when the Fed started providing this data, the 10-year to 2-year Treasury spread has accurately projected every recorded downturn in the United States, making it one of the best forecasters of a <strong>downturn.</strong></p>\n<h3>What is Yield Curve Risk?</h3>\n<p>The danger of an adverse movement in interest rates that investors or fixed-income instruments such as bonds face is referred to as yield curve risk. Yield curve risk arises from the fact that bond prices and interest rates are inversely related to one another.</p>\n<h3>The Differences Between Normal Yield Curve and Inverted Yield Curve</h3>\n<p>To begin, a normal yield curve leans upward, suggesting that shorter-term maturities have lower interest rates than longer-term maturities. This occurrence is referred to be \"normal\" because it often implies an economic situation in which individuals are prepared to invest for the long term at a way bigger risk in return for larger rewards.</p>\n<p>When the yield curve inverts, or when short-term interest rates exceed long-term interest rates, it indicates a bad economic forecast. A recession can be predicted by an inverted yield curve.</p>\n<p>On the occasion where the yield curve shifts shape, this indicates whether particular parts of the economy will surpass their peers.</p>\n<p>If short-term interests, for instance, increase as opposed to long-term ones, this may be a signal that inflationary pressures are increasing and that a higher rate of <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-inflation/">inflation might take place. So, if long-term interest rates are up compared to short-term interest rates, this might be an indication that growth forecasts are growing fin a quicker manner than <strong>inflationary</strong> anticipation, implying that higher short-term, interest rates are on the way.</p>\n<p>All in all, the yield curve is utilized to estimate if the economic processes will decelerate or accelerate in the upcoming time. An upward sloping yield curve is seen by economists as an indicator that growth will most likely <strong>pick up</strong> while a downward sloping curve is taken as an indicator that growth is anticipated to slow down.</p>","level":"hard","meta_title":"What is Yield Curve? Definition & Meaning | Crypto Wiki","meta_description":"Yield Curve meaning: Yield Curve - is a graphical representation of the connections between rates and maturities in fixed income markets.","meta_keywords":null,"language":"en","created_at":"2022-04-05T07:43:20.000000Z","updated_at":"2022-05-13T14:32:24.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-yield-curve"},"prevSection":{"id":825,"original_id":null,"author_id":42,"translator_id":null,"title":"What is x86 Virtual Machine (Qtum)?","slug":"what-is-x86-virtual-machine-qtum","section":"X","keyword":"x86 Virtual Machine (Qtum)","status":"published","definition":"x86 Virtual Machine – a machine created by Qtum for executing smart contracts in various programming languages.","content":"<p>The <strong>x86 Virtual Machine (VM)</strong>, developed by the Qtum team, can run <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-smart-contract/">smart contracts</strong></a> written in a variety of languages. This VM is quite similar to the current <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-ethereum-virtual-machine-evm/">Ethereum Virtual Machine (EVM)</strong></a>, although it has a few noticeable improvements. These improvements include:</p>\n<ul>\n<li>The Qtum VM can <strong>read contracts in any programming language</strong> that supports a <a href=https://www.bitdegree.org/"https://en.wikipedia.org/wiki/Just-in-time_compilation/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong>JIT compiler</strong></a>, including <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-c-plus-plus/">C++, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-java/">Java, <a href=https://www.bitdegree.org/"https://en.wikipedia.org/wiki/Python_(programming_language)/" target=\"_blank\" rel=\"nofollow noindex noopener\"><strong><strong>Python</strong></strong></a>, and other popular languages widely used in application development (EVM only reads <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-solidity/">Solidity language).</li>\n<li>The Qtum has implemented two new pricing models &ndash; fixed-fee per transaction and charge per transaction, in addition to supporting the standard gas model <em>(when users pay for each completed operation in a smart contract)</em> on <strong>Ethereum</strong>.</li>\n<li>The Qtum VM supports x86 registers and memory operations through a unified 16-bit instruction encoding approach that drastically reduces gas costs in common scenarios. This allows developers to do more operations per transaction on the Qtum blockchain, increasing its <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-throughput/">throughput./n/n

What Is Qtum?</h3>\n<p>Qtum is an open-source blockchain project that intends to combine <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin's stability with <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum's flexibility. It was <strong>created in</strong> 2016 by the Singapore-based Qtum Foundation, under the leadership of Patrick Dai, Neil Mahi, and Jordan Earls. Its <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-mainnet/">mainnet, on the other hand, <strong>was launched in 2017</strong>.</p>\n<p>Qtum protocol is a hybrid of Bitcoin Core, <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-stake-pos/">Proof-of-Stake (PoS) consensus</strong></a>, and the EVM. It <strong>enables the execution of smart contracts using a PoS consensus mechanism</strong>. This helps save electricity and decreases the risk of centralization compared to <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-proof-of-work-pow/">Proof-of-Work (PoW) consensus</strong></a>.</p>\n<p>Moreover, Qtum uses a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-decentralized-governance/">Decentralized Governance</strong></a> Protocol (DGP) to ensure that the <strong>blockchain continues to function even if a few nodes fail</strong>. DGP enables the modification of certain blockchain characteristics such as block size, gas price, and block interval without the requirement for a <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-hard-fork-blockchain/">hard fork</strong></strong></a>. It uses an <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-unspent-transaction-output-utxo/">unspent transaction output (UTXO)</strong></a> model for faster transaction processing, but it can also handle smart contracts in the same way as Ethereum does.</p>\n<p>The DGP in Qtum gives node operators particular choice privileges when it comes to updates like <strong>hard forks</strong>. Before modifications are applied to the blockchain, node operators must establish a consensus. This keeps the network from being destabilized by bugs or hacks, and it gives users explicit standards for keeping track of changes.</p>\n<p>Although there are other crypto projects seeking to achieve the same aims as Qtum, it is worth mentioning that <strong>Bitcoin's UTXO mechanism is what distinguishes it from them</strong>. Besides, Qtum is a platform that aims to create smart contracts and <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-are-decentralized-applications-dapps/">decentralized applications (dApps)</strong></a> that could be deployed in enterprise settings.</p>","level":"medium","meta_title":"What is x86 Virtual Machine (Qtum)? Definition & Meaning | Crypto Wiki","meta_description":"x86 Virtual Machine (Qtum) meaning: x86 Virtual Machine (Qtum) - x86 Virtual Machine – a machine created by Qtum for executing smart contracts in various programming languages.","meta_keywords":null,"language":"en","created_at":"2022-04-04T08:36:00.000000Z","updated_at":"2022-05-13T14:32:24.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-x86-virtual-machine-qtum"},"currentChapter":"Y","currentSection":"what-is-yield-sensitivity","chapterTitle":"Y","readingLevel":"easy"},"url":"/crypto/learn/crypto-terms/what-is-yield-sensitivity","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0">
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Crypto Terms: Letter Y

What is Yield Sensitivity?

Yield Sensitivity MEANING:
Yield Sensitivity - a measure that determines how much the price of a fixed income asset fluctuates as interest rates vary.
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Let's find out Yield Sensitivity meaning, definition in crypto, what is Yield Sensitivity, and all other detailed facts.

Yield sensitivity (also known as interest rate sensitivity) is a measure that shows how much the price of fixed-income assets swings as interest rates change. The higher the yield sensitivity, the more likely it is that the price of the asset will fall as interest rates rise. Depending on the impact an interest rate change has on the price of a bond, yield sensitivity can be either positive or negative.

It's usually calculated as the percentage change in price that would occur if a coupon rate of a bond increased by 1%. For instance, a bond with a $1,000 par value and a 5% coupon rate that is currently trading for $1,050 would have a yield sensitivity of 5%. This means that a 1% increase in interest rates would cause the bond's value to decline by 5%.

Interest rate sensitivity can be treated as an investment characteristic, which can help investors make better portfolio decisions. Since interest rates affect the value of bonds and other fixed-income investments, investors must consider their personal interest rate sensitivity when determining how much of these securities should be included in their portfolios.

Investors that are more sensitive to interest rate hikes favor investments with lower interest rate sensitivity, as they are less likely to lose money if the market swings against them. Investors who aren't concerned about rising interest rates prefer investments with a higher interest rate sensitivity because they aren't concerned about the investment's value being negatively influenced by a rise in interest rates.
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