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valputin valputin
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8 years ago
According to the liquidity premium theory of the term structure
A) because of the positive term premium, the yield curve will not be observed to be downward sloping.
B) the interest rate on long-term bonds will equal an average of short-term interest rates that people expect to occur over the life of the long-term bonds plus a term premium.
C) because buyers of bonds may prefer bonds of one maturity over another, interest rates on bonds of different maturities do not move together over time.
D) the interest rate for each maturity bond is determined by supply and demand for that maturity bond.
Textbook 
The Economics of Money, Banking and Financial Markets, Business School Edition

The Economics of Money, Banking and Financial Markets, Business School Edition


Edition: 4th
Author:
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Our course uses > The Economics of Money, Banking and Financial Markets
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MeelaMeela
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8 years ago
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valputin Author
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8 years ago
Perfect answer, thx
Our course uses > The Economics of Money, Banking and Financial Markets
wrote...
8 years ago
@valputin,

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