The preferred habitat theory holds that the shape of the yield curve is determined by investors' expectations of future interest rates.

Name: The preferred habitat theory holds that the shape of the yield curve is determined by investors' expectations of future interest rates.
Brand: Quizplus
Rating: 4.7 (31 reviews)

Question

Quizplus · Accepted Answer

The preferred habitat theory suggests that the shape of the yield curve is influenced by investors' preferences for certain maturities, not solely by expectations of future interest rates.

The Preferred Habitat Theory Holds That the Shape of the Yield