According to the Segmented Markets Theory of the Term Structure

question 114

Multiple Choice

According to the segmented markets theory of the term structure

• A)bonds of one maturity are close substitutes for bonds of other maturities,therefore,interest rates on bonds of different maturities move together over time.
• B)the interest rate for each maturity bond is determined by supply and demand for that maturity bond.
• C)investors' strong preferences for short-term relative to long-term bonds explains why yield curves typically slope downward.
• D)because of the positive term premium,the yield curve will not be observed to be downward-sloping.

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Definitions:

Transactional Analysis

A psychoanalytic theory and therapy wherein social transactions are analyzed to determine the ego state of the communicator as a basis for understanding behavior.

Human Personality

The combination of emotional, attitudinal, and behavioral response patterns of an individual, distinguishing one person from another.

Ego States

Psychological constructs representing different parts of one's personality or experiences, often used in transactional analysis.

Ego State

Represents the different parts of our personality that become activated in response to different situations, based on transactional analysis theory.