Which Theory of the Term Structure Proposes That Bonds of Different

question 98

Multiple Choice

Which theory of the term structure proposes that bonds of different maturities are not substitutes for one another?

• A)market segmentation theory
• B)expectations theory
• C)liquidity premium theory
• D)separable markets theory

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Definitions:

Theory of Mind

The cognitive ability to attribute mental states—beliefs, intents, desires, emotions—to oneself and others and to understand that others have beliefs and perspectives different from one's own.

Egocentrism

A cognitive trait characterized by difficulty in understanding or acknowledging viewpoints different from one's own.

Predict

To declare or indicate in advance; to foresee or calculate the future occurrence of something.

Underestimated

describes judging something or someone to be lower in value, strength, or importance than it actually is.