According to the market segmentation theory of the term structure,________
A: the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity.
B: bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time.
C: investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope upward.
D: all of the above.
E: none of the above.
A: the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity.
B: bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time.
C: investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope upward.
D: all of the above.
E: none of the above.
举一反三
- Of the four theories that explain how interest rates on bonds with different terms to maturity are related, the one that assumes that bonds of different maturities are not substitutes for one another is the ________
- Which of the following theories of the term structure is (are) able to explain the fact that interest rates on bonds of different maturities tend to move together over time?
- When the expected inflation rate decreases, the demand for bonds _________, the supply of bonds _________, and the interest rate _________.
- Bonds whose term to maturity is shorter than the holding period are also subject to _________
- Bonds with a maturity that is longer than the holding period have no interest - rate risk.