The ____ Theory of the Yield Curve Takes into Account

question 2

Multiple Choice

The ____ theory of the yield curve takes into account the supply and demand interactions between buyers and lenders of securities.

• A) expectations
• B) market segmentation
• C) preferred habitat
• D) liquidity premium

---

Definitions:

Delay Gratification

The ability to resist the temptation for an immediate reward and wait for a later, often larger or more valuable, reward.

Incremental Theorists

Individuals who believe that abilities and intelligence can be developed through effort and persistence, in contrast to the belief that such traits are fixed.

Entity Theorists

Individuals who believe that personal qualities, such as intelligence and character, are fixed and cannot change significantly over time.

Delay Gratification

The skill to forgo an immediate pleasure to receive a benefit in the future.