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Par yield curve

The curve of coupon rates at which bonds of each maturity would price exactly at par; the shape most commonly shown as the yield curve.

When a government issues a new bond it sets the coupon so the bond sells near 100. String those coupons across maturities and you get the par curve. It is the curve most charts mean when they say yield-curve.

The par curve, the zero-curve and the forward curve are three views of the same information. Where the par curve slopes upward, the zero curve sits above it and the forward curve above that.

Example: the par curve reads 4.9% at 1 year, 4.6% at 2 years, 4.3% at 5 years, 4.2% at 10 years. A new 10-year issued today would carry a 4.2% coupon and price around 100.

Related: zero-curve, spot-rate, bootstrapping, normal-yield-curve

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