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:

Polar Covalent

A type of chemical bond where a pair of electrons is unequally shared between two atoms, leading to a distribution of electric charge more concentrated around one atom.

Electronegativity Difference

The measure of the difference in electronegativity values between two atoms in a bond, determining the bond's character as ionic, polar covalent, or nonpolar covalent.

C-O Bond

A covalent bond between a carbon atom and an oxygen atom, integral to many organic compounds and carbonates.

C-F Bond

The carbon-fluorine bond (C-F bond) is one of the strongest in organic chemistry, imparting chemical stability and resistance to various compounds.