A major difference between the liquidity preference theory and the expectations theory is that the liquidity preference theory:
A) only deals in short-term securities.
B) recognizes that interest rate expectations are uncertain.
C) only deals in long-term securities.
D) assumes investors are risk averse and the expectations theory does not.

Question

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The Answer of A major difference between the liquidity preference theory and the expectations theory is that the liquidity preference theory:
A) only deals in short-term securities.
B) recognizes that interest rate expectations are uncertain.
C) only deals in long-term securities.
D) assumes investors are risk averse and the expectations theory does not.

A Major Difference Between the Liquidity Preference Theory and the Expectations