According to the Segmented Markets Theory, If Most Investors Suddenly

question 71

Multiple Choice

According to the segmented markets theory, if most investors suddenly preferred to invest in short-term securities and most borrowers suddenly preferred to issue long-term securities, there wouldbe

• A) upward pressure on the price of long-term securities.
• B) upward pressure on the price of short-term securities.
• C) downward pressure on the yield of long-term securities.
• D) A and C

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Definitions:

Log Transformation

A mathematical operation that replaces a variable with the logarithm of that variable to help normalize data or manage skewed distributions.

Arcsin Transformation

A data transformation technique used to stabilize the variance when the data follow a binomial distribution.

Categorical Variable

A variable that can take on one of a limited, and usually fixed, number of possible values, assigning each individual to a particular group or nominal category.

Quantitative Variable

A type of variable that represents measurable quantities and can be expressed in numeric values.