Question

Explain the market segmentation theory of the term structure.

Explain the market segmentation theory of the term structure.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Market segment theory states that market comprises of short term and long term interest securities. Each type of interest are distinctive in nature and divide the market into short term and long term. Individuals have their own preference for investments. Some invest in short term interest yielding bonds while others prefer long term yield. Therefore, the yield curve generally show upward trend as each market segment is determined by the forces of demand and supply with their own distinctive yielding characteristics.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assuming that the Market Expectations theory is the correct theory of the term structure, calculate the...
Assuming that the Market Expectations theory is the correct theory of the term structure, calculate the interest rates in the term structure for maturities of one to five years, for the following series of one –year interest rates; a. 5%, 7%, 7%,7%,7% b. 5%, 4%, 4%, 4%, 4%
Explain the Expectation Theory of the term structure of interest rates
Explain the Expectation Theory of the term structure of interest rates
Which of the term structure theories would support the argument that the yield curve is determined...
Which of the term structure theories would support the argument that the yield curve is determined by investors' expectations of future interest rates? Answer Options: The yield curve theory. The liquidity preference theory. The market segmentation theory. The unbiased expectations theory. The term structure of interest rates theory.
Using the Expectations Theory of the term structure, calculate the interest rates in the term structure...
Using the Expectations Theory of the term structure, calculate the interest rates in the term structure for maturities of 1 to 5 years for the following paths of one year interest rates over the next five years. Explain for each what the yield curve would look like. 3% 4% 5%   6%   7% 3% 2% 1%   1%   2%
Customer-Driven Marketing Strategy Explain in details what market segmentation and market targeting is Market Segmentation Propose...
Customer-Driven Marketing Strategy Explain in details what market segmentation and market targeting is Market Segmentation Propose one new product and you are required to do market segmenting based on the categories that you need. And choose which market segment will become your target market SWOT Analysis Explain in details what is SWOT analysis. Do SWOT (Strength, Weaknesses, Opportunities, Threats) Analysis for the product that you are going to sell (refer to question no. 2) Marketing Mix Propose 4Ps marketing mix...
Using the pure expectations theory of the term structure and the associated equation for the 10...
Using the pure expectations theory of the term structure and the associated equation for the 10 yr GS, explain what forward guidance means and how the use of it is supposed to influence the economy.
Describe the “pure expectations theory” of the term structure of interest rates
Describe the “pure expectations theory” of the term structure of interest rates
Identify a product that you have seen with either effective or ineffective market segmentation. Explain what...
Identify a product that you have seen with either effective or ineffective market segmentation. Explain what makes the market segmentation effective or ineffective.
1. What is a target market? 2. Explain the importance of market segmentation 3. What is...
1. What is a target market? 2. Explain the importance of market segmentation 3. What is a niche market? 4. What is a brand? 5. What re the four elements of the marketing mix?
Can an inverted (i.e., downward sloping) yield curve occur with the three theories of the term...
Can an inverted (i.e., downward sloping) yield curve occur with the three theories of the term structure of interest rates? (Pure expectations theory, liquidity preference theory, and market segmentation theory.) a. Yes. b. All except pure expectations. c. All except liquidity preference. d. None of the above
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT