The Expectations Theory Ignores Several Factors Including the Idea That

question 109

Multiple Choice

The expectations theory ignores several factors including the idea that:

• A) investors may have a preference for investing in longer-term bonds due to the added risk they offer over shorter-term bonds.
• B) investors may have a preference for investing in shorter-term bonds due to the added risk offered by longer-term bonds.
• C) some investors such as pension funds have a desire to match the maturity of their liabilities.
• D) All of the above
• E) both (b)and (c)

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