The theory suggesting that for any given issuer, long-term interest rates tends to be higher thanshort-term rates is called

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The theory suggesting that long-term interest rates will be higher than short-term rates is known as the liquidity preference theory. It suggests that investors prefer holding shorter-term securities because they are more liquid and less exposed to interest rate risk, resulting in higher demand and lower yields for those securities. As a result, longer-term securities must offer higher yields to compensate for the additional interest rate risk. The market segmentation theory suggests that different investor groups focus on specific maturities based on their investment needs, while the expectation hypothesis assumes that long-term rates are a function of expected future short-term rates.

The Theory Suggesting That for Any Given Issuer, Long-Term Interest