According to Segmented Markets Theory, If Investors Have Mostly Long-Term

question 23

Multiple Choice

According to segmented markets theory, if investors have mostly long-term funds available and borrowers want short-term funds, this will place ____ pressure on the demand for long-term funds issued by borrowers and the yield curve will be ____ sloping.

• A)upward; downward
• B)downward; upward
• C)upward; upward
• D)downward; downward

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Definitions:

Inflation Rates

The rate at which the general level of prices for goods and services is rising, eroding purchasing power over time.

Interest Rates

The cost of borrowing money, expressed as a percentage of the amount borrowed, charged by lenders to borrowers.

Trade Surpluses

A situation where a country's exports exceed its imports during a specific period, reflecting a positive balance of trade.

Realized Gain

Gain that results from the sale of an asset or investment, which has turned into actual cash or an equivalent.