The Maturity Risk Premium Is the Compensation Expected by Investors

question 35

True/False

The maturity risk premium is the compensation expected by investors due to interest rate risk on debt instruments with longer maturity.

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Definitions:

Self-Determination Theory

A theory of motivation that suggests people are driven to grow and change by three innate and universal psychological needs: competence, autonomy, and relatedness.

Competence

Competence refers to the ability of an individual or organization to effectively perform a task or job, based on their knowledge, skills, and experience.

Need Theories

Motivation theories that specify the kinds of needs people have and the conditions under which they will be motivated to satisfy these needs in a way that contributes to performance.

Motivate People

The act of encouraging or inspiring individuals to take action or pursue goals.