In the Market Segmentation Theory

question 27

Multiple Choice

In the market segmentation theory:

• A)the investors would consider investing shorter term than their investment horizon if they expect an increase in the interest rates.
• B)an additional reward must be offered to investors to invest in a maturity that is not their favourite.
• C)the investors only supply funds for securities with a maturity corresponding to their investment horizon.
• D)a change in yield in one segment affects other segments at once.

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Definitions:

Assimilating

The process of absorbing new information into our previously existing schemas or understanding, especially noted in the context of learning and cognitive development.

Transitivity

In mathematics, a property indicating that if a relation holds between a and b, and b and c, then it also holds between a and c. In linguistics, it refers to a property of verbs that require both a subject and one or more objects.

Principle

A fundamental truth or proposition that serves as the foundation for a system of belief or behavior or for a chain of reasoning.

Arbitrary

Based on random choice or personal whim, rather than any reason or system.