Which of the Following Theories State That the Shape of the Yield

question 39

Multiple Choice

Which of the following theories state that the shape of the yield curve is essentially determined by the supply and demands for long-and short-maturity bonds?

• A) Liquidity preference theory.
• B) Expectations theory.
• C) Market segmentation theory.
• D) All of these.
• E) None of these.

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Definitions:

Motivated

Refers to the drive, desire, or willingness of an individual to take action or achieve a certain goal.

Law of Effect

A psychological principle stating that behaviors followed by favorable consequences tend to be repeated, while behaviors followed by negative consequences are less likely to be repeated.

Pleasant Outcomes

Positive results or benefits that are satisfying or enjoyable, often as a result of specific actions or behaviors.

Unpleasant Outcomes

Negative consequences or results that arise from specific actions or situations.