The belief that investors require a higher return to entice them into holding long-term securities is the viewpoint of the

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The belief that investors require a higher return to entice them into holding long-term securities is the central idea of the liquidity premium theory. This theory suggests that the yield curve's shape is determined by the market's expectations of future interest rates, as well as the additional premium investors demand to hold long-term securities due to their illiquidity.

The Belief That Investors Require a Higher Return to Entice