Which one of the following statements concerning the modern fixed-income market is correct?
A)Pension funds generally have a preference for short maturities.
B)Current maturity preference theory states that both borrowers and lenders prefer short maturities.
C)Market segmentation theory does little to explain the modern fixed-income market.
D)The major borrower in the modern market borrows primarily on a long-term basis.
E)Institutional investors tend to invest in only one maturity range.

Question

Quizplus · Accepted Answer

Market segmentation theory explains that different types of investors have different maturity preferences, which is a key characteristic of the modern fixed-income market.

Which One of the Following Statements Concerning the Modern Fixed-Income