The ________ of the Term Structure of Interest Rates States

question 99

Multiple Choice

The ________ of the term structure of interest rates states that the interest rate on a long-term bond will equal the average of short-term interest rates that individuals expect to occur over the life of the long-term bond,and investors have no preference for short-term bonds relative to long-term bonds.

• A)segmented markets theory
• B)expectations theory
• C)liquidity premium theory
• D)separable markets theory

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Definitions:

Express Repudiation

The act of clearly and explicitly refusing to perform an obligation or duty outlined in a contract.

Obligations Refusal

A situation where an individual or entity declines to fulfill a duty or agreement previously committed to.

Liquidated Damages

A set sum of money required as a penalty for not fulfilling contractual obligations.

Injunction

A legal order issued by a court that directs an individual or entity to do or to refrain from doing a specific act, used to prevent harm or to preserve the status quo pending a final determination of the case.