The segmented markets theory of term structure:

Select one:

a. explains upward-sloping yield curves as a result of the demand for long-term bonds being high, relative to the demand for short-term bonds.

b. explains upward-sloping yield curves as a result of the demand for long-term bonds being low, relative to the demand for short-term bonds.

c. explains upward-sloping yield curves as a result of the favourable tax treatment of long-term bonds.

d. is unable to explain upward-sloping yield curves.