The ________ of the term structure of interest rates states that the interest rate on a long-term bond will equal the average of short-term interest rates that individuals expect to occur over the life of the long-term bond, and investors have no
preference for short-term bonds relative to long-term bonds. A) segmented markets theory
B) expectations theory
C) liquidity premium theory
D) separable markets theory
B
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Melissa has an income of $240 a month to spend on tennis lessons and concert tickets. The price of a tennis lesson is $20, and the price of a concert ticket is $40
If the quantity of tennis lessons is QT, and the quantity of concert tickets is QC, Melissa's budget line equation is A) QC = 6 - 0.5QT. B) QC = 12 - 2QT. C) QC = 240 - 40QT. D) QC = 20 + 40QT.
Suppose that D2 and S1 are the prevailing demand and supply curves for a product. If the demand schedule changes from D2 to D1, then:
a equilibrium price increases from $6 to $8.
b equilibrium quantity increases from 13 to 18
c equilibrium quantity decreases from 15 to 13.
d equilibrium price decreases from $6 to $4.