The Theory of the Term Structure of Interest Rates, Which

question 7

Multiple Choice

The theory of the term structure of interest rates, which states that investors and borrowers choose securities with maturities that satisfy their forecasted cash needs, is the

• A)pure expectations theory.
• B)liquidity premium theory.
• C)segmented markets theory.
• D)liquidity habitat theory.

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Definitions:

Global Markets

Markets that cross national borders, allowing for the buying and selling of goods and services internationally, increasing competition and diversification.

Direct Mail

A marketing strategy involving the sending of promotional materials directly to potential customers' homes or businesses.

Growth

The process of increasing in size, value, or importance.

Reliability

Reliability in the context of products or services refers to the consistency of performance over time and the likelihood of failing to function as intended.