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7 According to the segmented markets theory of the term structure (1.01) buyers require an additional incentive to hold long-term bonds. 3 interest rates on
7 According to the segmented markets theory of the term structure (1.01) buyers require an additional incentive to hold long-term bonds. 3 interest rates on bonds of different maturities do not move together over time. buyers of bonds do not prefer bonds of one maturity over another, 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
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