Which One of the Following Statements Concerning the Modern Fixed-Income

question 6

Multiple Choice

Which one of the following statements concerning the modern fixed-income market is correct?

• A)Pension funds generally have a preference for short maturities.
• B)Current maturity preference theory states that both borrowers and lenders prefer short maturities.
• C)Market segmentation theory does little to explain the modern fixed-income market.
• D)The major borrower in the modern market borrows primarily on a long-term basis.
• E)Institutional investors tend to invest in only one maturity range.

---

Definitions:

Scientific Method

A procedure for acquiring knowledge that emphasizes collecting concrete data through observation and experimentation.

Research Method

A systematic approach to collecting data and analyzing it to answer a specific question or test a hypothesis.

Analyze Data

The process of systematically applying statistical, logical, or mathematical techniques to describe and evaluate data.

Paradigm Shift

A major change in basic assumptions of a particular scientific discipline.