In the ___ theory, more emphasis is placed on the role of the extra return given investors which entices them to purchase the riskier security.

Question

Quizplus · Accepted Answer

The liquidity preference theory suggests that investors demand a higher return (extra return) for investing in longer-term, riskier securities, as they generally prefer the liquidity and lower risk of shorter-term securities.

In the ___ Theory, More Emphasis Is Placed on the Role