The Yield Curve Theory That Hypothesises That Investors Prefer Short-Term

question 60

Multiple Choice

The yield curve theory that hypothesises that investors prefer short-term securities because of the risk associated with longer term securities is the:

• A) expectations hypothesis.
• B) liquidity premium hypothesis.
• C) market segmentation theory.
• D) capital markets theory.

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Definitions:

Gray Matter

Region of the brain composed mainly of neuronal cell bodies, involved in muscle control, sensory perception, and decision making.

Pruning

The process of synapse elimination in the brain, where weaker neural connections are removed to strengthen important ones, crucial for brain development.

Early Menarche

The onset of the first menstrual cycle at an earlier age than the statistical average, a factor that may influence physical and psychological health outcomes.

Parental Warmth

Describes the affection, support, and nurturing behavior exhibited by parents towards their children, which is crucial for healthy psychological development.