__________ postulates that many borrowers and lenders favor securities that have maturities of a particular length. This favoritism creates a degree of market segmentation between the short-term and long-term securities markets.
A)The term structure of interest rates
B)The geometric average theory
C)The expectations theory
D)The preferred habitat theory

Question

Quizplus · Accepted Answer

The preferred habitat theory postulates that many borrowers and lenders favor securities that have maturities of a particular length, which creates a degree of market segmentation between short-term and long-term securities markets.

__________ Postulates That Many Borrowers and Lenders Favor Securities That