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
E)two of the above are not considered to be a basic theory

Question

Quizplus · Accepted Answer

The loanable funds theory is not a basic theory used to explain the term structure of interest rates. The basic theories are expectations theory, liquidity premium theory, and market segmentation theory.

Which of the Following Is Not Considered to Be a Basic