According to the Expectations Theory of the Term Structure

question 3

Multiple Choice

According to the expectations theory of the term structure

• A)the interest rate on long-term bonds will exceed the average of short-term interest rates that people expect to occur over the life of the long-term bonds,because of their preference for short-term securities.
• B)interest rates on bonds of different maturities move together over time.
• C)buyers of bonds prefer short-term to long-term bonds.
• D)buyers require an additional incentive to hold long-term bonds.

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Definitions:

Organization

A structured group of people working together to achieve common goals.

Personal Power

Refers to the influence or authority an individual possesses that stems from within, often based on competence, skill, or personality, rather than formal position.

Referent Power

A form of influence based on the ability to inspire admiration, respect, or affection from others, often stemming from one's charisma or likability.

Coercive Power

A form of power that is based on the ability to deliver punishments or impose negative consequences on other people.