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9 September, 16:45

According to this theory of the term structure, bonds of different maturities are not substitutes for one another.

A. Separable markets theory.

B. Liquidity premium theory.

C. Segmented markets theory.

D. Expectations theory

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  1. 9 September, 18:12
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    Answer: For the given question the following option is the most suitable one: Segmented markets theory

    This theory states that long and short-term interest rates are not accompanying to each other. It also states that the predominant interest rates for short, in-between, and long-term bonds should be viewed individually like unit in different securities industry for debt instrument.

    The correct option in this case is (c)
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