According to the Segmented Markets Theory of the Term Structure

question 39

Multiple Choice

According to the segmented markets theory of the term structure

• A)the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds.
• B)buyers of bonds do not prefer bonds of one maturity over another.
• C)interest rates on bonds of different maturities do not move together over time.
• D)buyers require an additional incentive to hold long-term bonds.

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Definitions:

Subatomic Particles

Particles that are smaller than an atom, including protons, neutrons, and electrons, which make up the atoms' structure.

Protons

Positively charged particles found in the nucleus of an atom.

Neutrons

Neutral particles within an atom's nucleus, contributing to the atom's mass but not its charge.

Atom

The basic unit of a chemical element, made up of a nucleus surrounded by electrons.