The Preferred Habitat Theory Holds That the Shape of the Yield

question 58

True/False

The preferred habitat theory holds that the shape of the yield curve is determined by investors' expectations of future interest rates.

---

Definitions:

Evaluating Purpose

The process of assessing the reason or objective behind an action, work, or study.

Test Purpose

The specific objective or reason for conducting a test, which can include assessing knowledge, skills, abilities, or evaluating a product or system's performance.

General Purpose

Designed or suitable for a wide range of uses or applications, not specialized in function or design.

Specific Purposes

Particular aims or intentions for which something is done or created.