1. A yield curve can be built using deposit rates, swap rates, and future/forward rates
2. A par-coupon rate is the yield to maturity of a coupon-paying bond whose market price equals 100% of its face value.
Although par coupon rates are very rarely observable in the bond market, interest rate swaps are quoted as par-coupon rates.
3. In an upward-sloping yield curve, bonds with smaller coupons will have higher yields and bonds with larger coupons will have lower yields. In a downward-sloping yield curve, bonds with smaller coupons will have lower yields and bonds with larger coupons will have higher yields. Only in a completely flat yield curve will bonds with different coupons have equal yields ???
4. If interest rates fall, investors will earn a return below the par-coupon yield. This is known as reinvestment risk.???