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ddd [48]
2 years ago
15

The ________ of the term structure states the following: the interest rate on a long-term bond will equal an average of short-te

rm interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond.
Business
1 answer:
rjkz [21]2 years ago
7 0

Answer:

liquidity premium theory

Explanation:

The liquidity premium theory states that those that invest in bonds do prefer high liquid as well as securities that are short-dated so that it can be sold fast compare to long-dated ones. It states that investors do get compensation for higher default risk when there is change in interest rate.

It should be noted that The liquidity premium theory of the term structure states the following: the interest rate on a long-term bond will equal an average of short-term interest rates expected to occur over the life of the long-term bond plus a term premium that responds to supply and demand conditions for that bond.

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ANSWER: B) activities producing tangible products, such as radios, newspapers, buses, and textbooks

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A. the FCAC is less than the TBC

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2 years ago
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nexus9112 [7]
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When recording the payment of interest using the effective-interest method, the entry will include a ______ to Discount on bonds
goldfiish [28.3K]

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Consider two economic regions, region A and region B. If region A has strict union protection laws present, while region B lacks
barxatty [35]

Answer:

higher unemployment rate

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