The Implication of the Expectations Theory That Expected Returns for a Holding

question 72

Multiple Choice

The implication of the expectations theory that expected returns for a holding period must be the same for bonds of different maturities depends on the assumption that

• A)yield curves usually slope upward.
• B)yield curves usually slope downward.
• C)instruments with different maturities are perfect substitutes.
• D)savers are usually risk averse.

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Definitions:

Trait

A characteristic or quality that defines an individual and influences their behavior or attitudes.

Extraversion

A personality trait characterized by a tendency to be outgoing, sociable, and energetic, typically enjoying engagement in social settings and interactions.

Dominance

The exercise of power or influence over others to command, control, or prevail in a social or competitive setting.

Big Five Personality

A conceptual model that outlines human personality through five major traits: openness, conscientiousness, extraversion, agreeableness, and neuroticism.