Any Theory of the Term Structure of Interest Rates Needs

question 52

Multiple Choice

Any theory of the term structure of interest rates needs to explain each of the following, except why:

• A) short-term yields are more volatile than long-term yields.
• B) the yields of different maturities tend to move together.
• C) short-term yields are usually higher than long-term yields.
• D) long-term yields are usually higher than short-term yields.

---

Definitions:

Long-Term Orientation

A cultural dimension that reflects a society's attitude towards future challenges and opportunities, emphasizing perseverance and savings for future benefit.

Society Embraces

The acceptance or adoption of ideas, behaviors, or innovations by the general public or community.

Future Rewards

Future rewards refer to the benefits or compensation that an individual or group anticipates receiving as a result of their actions or decisions in the future.

Cultural Value

Deeply rooted beliefs shared by a community that influence behavior and shape perceptions, contributing to the identity of a social group.