Which of the following is not considered to be a basic theory used to explain the term structure of interest rates?
A) expectations theory
B) loanable funds theory
C) liquidity premium theory
D) market segmentation theory

Question

Quizplus · Accepted Answer

The loanable funds theory is not specifically a theory used to explain the term structure of interest rates. Instead, it is a broader concept that describes the market where borrowers and lenders interact to determine interest rates, not the relationship between interest rates over different maturities. The expectations theory, liquidity premium theory, and market segmentation theory are all directly related to explaining the term structure of interest rates.

Which of the Following Is Not Considered to Be a Basic