The Theory Suggesting That for Any Given Issuer, Long-Term Interest

question 105

Multiple Choice

The theory suggesting that for any given issuer, long-term interest rates tends to be higher than short-term rates is called

• A) expectation hypothesis.
• B) liquidity preference theory.
• C) market segmentation theory.
• D) none of the above.

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Definitions:

Negotiated

Negotiated refers to having discussed and agreed upon terms or conditions through a process of bargaining or dialogue between parties.

Holder

The person in possession of a negotiable instrument.

Cheques

Written orders directing a bank to pay a specified sum of money from the writer's account to the person or entity named on the cheque.

Bills Of Exchange

Documents that signify a written order directing one party to pay a determined sum to another by a specific date.