Given a choice between 5-year and 1-year instruments most people would choose 5-year instruments when borrowing and 1-year instruments when lending. Which of the following is a theory consistent with this observation? Select one: O a. Expectations theory O b. Market segmentation theory Oc. Liquidity preference theory d. Maturity preference theory

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Given a choice between 5-year and 1-year instruments most people would choose 5-year
instruments when borrowing and 1-year instruments when lending. Which of the following is
a theory consistent with this observation?
Select one:
O a. Expectations theory
O b. Market segmentation theory
O. Liquidity preference theory
O d. Maturity preference theory
Transcribed Image Text:Given a choice between 5-year and 1-year instruments most people would choose 5-year instruments when borrowing and 1-year instruments when lending. Which of the following is a theory consistent with this observation? Select one: O a. Expectations theory O b. Market segmentation theory O. Liquidity preference theory O d. Maturity preference theory
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