The Market Segmentation and Preferred Habitat Theories of Term Structure

question 36

Multiple Choice

The market segmentation and preferred habitat theories of term structure

• A) are identical.
• B) vary in that market segmentation is rarely accepted today.
• C) vary in that market segmentation maintains that borrowers and lenders will not depart from their preferred maturities and preferred habitat maintains that market participants will depart from preferred maturities if yields on other maturities are attractive enough.
• D) a and b.
• E) b and c.

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Definitions:

Brand Name

A distinctive name identified with a product or company, used to establish a unique identity in the marketplace.

Market Segments

Distinct groups of customers within a market who share similar needs, preferences, or characteristics, allowing businesses to target them with specific products or services.