Answer (D) is correct. The term structure of interest rates is the relationship between long- and short-term interest rates, that is, between yield to maturity and time to maturity. It is graphically depicted by a yield curve with a rate of return on the vertical axis and time to maturity on the horizontal axis. If short-term rates are higher than long-term rates, the curve will be downward sloping. If the reverse is true, the curve will be upward sloping.