[Solved] According to the Liquidity Premium Theory of the Term Structure

Question 85
Multiple Choice
arrowQuestion 85arrow

According to the liquidity premium theory of the term structure


A)because buyers of bonds may prefer bonds of one maturity over another,interest rates on bonds of different maturities do not move together over time.
B)the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium.
C)because of the positive term premium,the yield curve will not be observed to be downward sloping.
D)the interest rate for each maturity bond is determined by supply and demand for that maturity bond.

10+ million students use Quizplus to study and prepare for their homework, quizzes and exams through 20m+ questions in 300k quizzes.

Business

Explore our library and get Economics Homework Help with various study sets and a huge amount of quizzes and questions

Related Questions


Get Free Access Now!
upload
Upload

Get free access by uploading any valuable academic documents

Invite
Invite

Invite your friends by sharing your unique referral link, and get a free access

Invite a friendInvite a friendInvite a friend
Join Us
Join Us

Sign up to get 5 free question for every quiz you visit. Or Subscribe and get instant access