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Market segmentation theory explains the downward sloping shape of yield curves as a function of the greater liquidity of short-term notes as compared to long-term

  1. Market segmentation theory explains the downward sloping shape of yield curves as a function of

    the greater liquidity of short-term notes as compared to long-term bonds.

    greater demand for short-term notes than for long-term bonds.

    expectations that inflation will be higher in the future than it is now.

    greater demand for long-term bonds than for short-term notes.

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