Which of the Following Is Not Considered to Be a Basic

question 2

Multiple Choice

Which of the following is not considered to be a basic theory used to explain the term structure of interest rates?

• A)expectations theory
• B)loanable funds theory
• C)liquidity premium theory
• D)market segmentation theory
• E)all of the above are theories used to explain the term structure of interest rates.

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Definitions:

Foreign Investment

Investment in domestic companies and assets of another country by a foreign investor, aiming to gain returns.

Circle

A simple closed shape consisting of all points in a plane that are a given distance from a given point, the centre.