Which one of the following proposes that lenders must be financially rewarded for loaning funds on a long-term versus a short-term basis?
A)expectations theory
B)forward rate theory
C)market hypothesis
D)maturity preference theory
E)Fisher hypothesis

Question

Quizplus · Accepted Answer

The maturity preference theory proposes that lenders must be financially rewarded for loaning funds on a long-term versus a short-term basis. According to this theory, lenders have a preference for liquidity and thus demand a higher yield for taking on the risk of committing their funds over a longer time horizon.

Which One of the Following Proposes That Lenders Must Be