The Market Segmentation Hypothesis Suggests That the Yield Curve Bends

question 173

Multiple Choice

The Market Segmentation hypothesis suggests that the yield curve bends at some point along its length because:

• A) Investors have less appetite for longer-term investments
• B) Borrowers prefer to borrow long-term but lenders prefer to lend short-term
• C) Different types of institution tend to specialize in different maturity ranges
• D) The risk premium becomes significant only at longer maturities

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Definitions:

Job Enlargement

The process of increasing the variety and number of tasks that an employee performs to reduce monotony and increase job satisfaction.

Compressed Workweek

Allows a full-time job to be completed in fewer than the standard five days.

Job Simplification

Job simplification standardizes work to create clearly defined and highly specialized tasks.

Absenteeism

The habitual non-presence of an employee at their job without a valid excuse, often a sign of employee disengagement or dissatisfaction.