In actual practice,short-term interest rates and long-term interest rates usually move together;this is the major shortcoming of the
A)segmented markets theory.
B)expectations theory.
C)liquidity premium theory.
D)separable markets theory.

Question

Quizplus · Accepted Answer

The segmented markets theory suggests that short-term and long-term interest rates are determined independently of each other, based on supply and demand within each segment. The observation that short-term and long-term rates usually move together contradicts this theory, highlighting its major shortcoming.

In Actual Practice,short-Term Interest Rates and Long-Term Interest Rates Usually