Suppose the interest rates on one-, five-, and ten-year US Treasury bonds are currently 3%, 6%, and 6%. respectively. Investor A chooses to hold only one-year bonds and investor B is inerrant with grad to holding five - and ten-year bonds. Which theories best explain the behavior of Investors A and B?
A. Both Investors A and B exhibit preferences that are consistent with expectations theory.
B. Investor A's preferences are best explained by the liquidity premium theory, while Investor B's preferences are more consistent with the segmented markets Theory
C. Investor A's preferences are best explained by the segmented markets theory, while Investor B's preferences are more consistent with the expectations theory.
D. Both Investors A and B exhibit preferences that are consistent with the segmented markets theory.
Answers (1)
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “Suppose the interest rates on one-, five-, and ten-year US Treasury bonds are currently 3%, 6%, and 6%. respectively. Investor A chooses to ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What is the process of gathering, organizing, and analyzing market information
Answers (1)
Damaged and obsolete goods that can be sold: Multiple Choice A) Are never counted as inventory. B) Are included in inventory at their full cost. C) Are included in inventory at their net realizable value. D) Should be disposed of immediately.
Answers (1)
Awnings Incorporated has beginning net fixed assets of $234,100 and ending net fixed assets of $243,600. Assets valued at $42,500 were sold during the year. Depreciation was $62,500. What is the amount of net capital spending? a. $42,500b. $9,500c.
Answers (1)
Compare and contrast goods and services
Answers (1)
When should you include your GPA on your résumé?
Answers (1)
New Questions in Business
A parcel delivery company delivered 103,225 packages last year, when its average employment was 85 drivers. This year the firm handled 112,260 deliveries with 92 drivers.
Answers (1)
Currency is? A. an adjective for current economic news B. Stocks and bonds C. paper bills and coins D. government-issued bank checks.
Answers (1)
An adjustment for Prepaid Rent would indicate the amount a. originally paid. b. expired. c. on hand. d. of the trial balance.
Answers (1)
What are the benefits of doing business in other countries?
Answers (1)
At allen and thomas architects, a group of designers are developing the first drawings for a proposed multiuse office development in an older section of a large city that is being revitalized. what type of work team is this group?
Answers (1)