Real interest rate A. A theory used to explain the term structure of interest rates which states that every borrower and every lender has a preferred maturity and that the slope of the yield curve depends on the supply of and demand for funds in the short- and long-term markets. Capital gain B. The graphical representation of the relationship between the interest rate and the time to maturity of the debt for a specified borrower in a given currency and on a given date. Default risk C. The chance that the return earned by a financial asset w increase or decrease due to a change in the value of an opportunity cost (market) interest rate. Term structure of interest rates D. The characteristic of an asset whereby it can be sold at any time in a relatively short period of time with a minimum loss of value. Interest rate risk E. This theory of interest rates argues that the slope of the yield curve reflects the future inflationary expectations of investors, all else being equal. Liquidity F. The return generated by an investment expressed as a percentage and calculated by dividing the investment's cash flows by its purchase price. Market segmentation theory G. The chance that an investment will generate more than one possible return due to the potential for the investment's issuer failure to repay fully its interest or principal repayment obligations or satisfy the other terms in the investment agreement. Yield curve H. The name given to an interest rate that excludes the effect of expected future inflation. Expectations theory I. The mathematical relationship between the interest rate and the time to maturity of the debt securities of a given borrower on a given date and denominated in a given currency. Yield J. Calculated as the difference between a higher selling price and a lower purchase price, this profit results from the appreciation in a asset's value