A Key Assumption in the Segmented Markets Theory Is That

question 69

Multiple Choice

A key assumption in the segmented markets theory is that bonds of different maturities

• A)are not substitutes at all.
• B)are perfect substitutes.
• C)are substitutes only if the investor is given a premium incentive.
• D)are substitutes but not perfect substitutes.

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Definitions:

Liability

The state of being legally responsible for something, especially in terms of debts or legal obligations.

Duty of Accounting

An agent’s obligation to keep an accurate account of the transactions of money and property made on behalf of the principal.

Agent

A representative authorized to act on behalf of another person or organization, especially in business or legal matters.

Principal

The original amount of money invested or loaned, upon which interest is calculated, or the main party involved in a transaction.