According to this theory of the term structure,bonds of different maturities are not substitutes for one another.
A) Segmented markets theory
B) Expectations theory
C) Liquidity premium theory
D) Separable markets theory

Question

Quizplus · Accepted Answer

The Segmented Markets theory proposes that different maturities of bonds are not substitutes for one another due to segmented markets, where investors specialize in specific maturity ranges. This theory suggests that interest rates in different segments of the market are determined by supply and demand within each particular segment, and do not necessarily affect one another.

According to This Theory of the Term Structure,bonds of Different