Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

A reason why interest rates are different for different loan terms is that the pool of borrowers or lenders for a short-term have different characteristics

A reason why interest rates are different for different loan terms is that the pool of borrowers or lenders for a short-term have different characteristics and investment motivations than the pool of borrowers or lenders for a longer-term. This explanation is called:

a) Opportunity cost theory b) Liquidity preference theory c) Preferred habitat theory d) Market segmentation theory e) Expectations theory

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Bond Markets Analysis And Strategies

Authors: Frank J. Fabozzi, Francesco A. Fabozzi

10th Edition

026204627X, 978-0253337535

More Books

Students also viewed these Finance questions

Question

Review the findings of humanistic psychotherapy outcome research.

Answered: 1 week ago