The Segmented Markets Theory

question 11

Multiple Choice

The segmented markets theory

• A)has difficulty explaining why yield curves usually slope up.
• B)has difficulty explaining why yield curves usually slope down.
• C)has difficulty explaining why yields on instruments of different maturities tend to move together.
• D)provides a good explanation of why yields on instruments of different maturities tend to move together.

---

Definitions:

FIFO

First-In, First-Out, an accounting method where the oldest inventory items are recorded as sold first.

ROE

ROE, or Return on Equity, measures a corporation’s profitability by revealing how much profit it generates with the money shareholders have invested.

Investments

The act of allocating resources, usually money, with the expectation of generating an income or profit.

Compound Leverage Factor

A metric used to evaluate the effectiveness of using borrowed funds or financial derivatives to increase investment returns.