Which of These Is NOT a Theory That Explains the Shape

question 4

Multiple Choice

Which of these is NOT a theory that explains the shape of the term structure of interest rates?

• A) liquidity theory
• B) market segmentation theory
• C) short-term structure of interest rates theory
• D) unbiased expectations theory

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Definitions:

Psychoanalysis

A method of psychology founded by Sigmund Freud that focuses on unconscious mental processes and conflicts.

Inferior

Lower in rank, quality, or importance; often reflecting a comparative assessment.

Differentiate

To recognize or ascertain what makes something or someone different; often involves distinguishing or separating into categories based on characteristics or qualities.

Affiliate

To connect or associate with a larger organization, group, or cause, often to gain or offer support.