The Key Assumption of the Preferred Habitat Theory Is That

question 69

Multiple Choice

The key assumption of the preferred habitat theory is that investors

• A)view bonds of different maturities as perfect substitutes.
• B)view bonds of different maturities as completely unsubstitutable.
• C)always choose the bond with the highest expected return, regardless of maturity.
• D)care about both expected returns and maturity.

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Definitions:

Oxytocin Levels

Concentrations of oxytocin, a hormone involved in social bonding, sexual reproduction, and childbirth, in an individual's body.

Optimistic Outlook

A mindset that tends to view situations and the future in a positive light, expecting favorable outcomes.

Type A Personality

A characteristic where an individual exhibits intense competitiveness, self-driven stress, and an ongoing feeling of haste.

External Locus

External Locus refers to an external locus of control, where individuals believe that their lives are controlled by external factors rather than their own actions.