Which Theory of Term Structure Argues That Individual Investors Have

question 21

Multiple Choice

Which theory of term structure argues that individual investors have specific maturity preferences?

• A)The unbiased expectations theory.
• B)The liquidity premium theory.
• C)The loanable funds theory.
• D)The market segmentation theory.
• E)None of these.

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Definitions:

Imperfectible

The belief that it is impossible to achieve perfection or complete improvement in the human condition.

Functional

In sociology, referring to the aspects of societies or institutions that contribute to their stability and continuity by fulfilling necessary roles.

Practical

Pertains to real-world applications or actions rather than theoretical ideas, emphasizing usability and effectiveness in everyday situations.

Functionalist Theorists

Scholars who analyze society through the lens of function, arguing that each aspect of society is interdependent and contributes to society's functioning as a whole.