Some Analysts Believe That the Term Structure of Interest Rates

question 20

Multiple Choice

Some analysts believe that the term structure of interest rates is determined by the behaviour of various types of financial institutions.This theory is called the:

• A) expectations hypothesis.
• B) segmentation theory.
• C) liquidity premium theory.
• D) theory of industry supply and demand for bonds.

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Definitions:

Parasympathetic

The part of the autonomic nervous system that conserves energy by slowing the heart rate and increasing digestive activities.

Gonads

Sex glands; secrete hormones that regulate sexual development and behavior as well as reproduction.

Sex Glands

Organs that produce sex hormones and gametes, such as ovaries in females and testes in males.

Cortisol

A steroid hormone released in response to stress and low blood-glucose concentration, involved in metabolism and immune response.