Which Theory That Suggests That Investors Typically Prefer More Liquid

question 22

Multiple Choice

Which theory that suggests that investors typically prefer more liquid, shorter-term bonds?

• A) preferred habitat.
• B) the yield curve.
• C) liquidity preference.
• D) none of the above.

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Definitions:

Standard Deviation

A statistical measurement that sheds light on historical volatility.

Upper Partial Standard Deviation

A statistical measure focusing on the variability of an investment's returns above the mean, used to assess the risk of higher-than-average returns.

Holding-Period Return

The return on an investment over the period it is held, incorporating both income and capital gains.

Dividend

A distribution of profits by a corporation to its shareholders, often in the form of a payment.