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

question 11

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) interest parity theory

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Definitions:

Holder in Due Course

A legal term referring to a party that has acquired a negotiable instrument in good faith and for value and thus has certain protections against defenses and claims that could be asserted against the transferor.

Personal Defenses

Legal arguments or claims that an individual can use personally to avoid enforcement of a contract or legal obligation against them.

Contractual Defenses

Legal arguments that can be used to challenge the enforceability of a contract.

Promissory Note

A financial document in which one party promises to pay another party a specific sum of money on a specified date or on demand.