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Test. Which theory of the following term structure of interest rates is the most effective explanation for the relationship between bond interest rates of different

Test. Which theory of the following term structure of interest rates is the most effective explanation for the relationship between bond interest rates of different maturities reflected in our observed empirical facts?

A. Liquidity premium theory.

B. Expectation theory.

C. Segmented market theory

D. Risk premium theory.

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