menu-iconExamlexExamLexServices

Discover

Ask a Question
  1. All Topics
  2. Topic
    Business
  3. Study Set
    Capital Markets Institutions
  4. Exam
    Exam 19: The Term Structure of Interest Rates
  5. Question
    According to the Liquidity Theory of the Term Structure, the Forward
Solved

According to the Liquidity Theory of the Term Structure, the Forward

Question 3

Question 3

Multiple Choice

According to the liquidity theory of the term structure, the forward rate should reflect both interest rate expectations and:


A) A liquidity premium.
B) A risk premium.
C) A maturity premium.
D) A marketability premium.
E) None of the above.

Correct Answer:

verifed

Verified

Related Questions

Q1: The market segmentation theory recognizes that investors

Q2: Using spot rates, the theoretical value of

Q4: When the yield declines as maturity increases,

Q5: The pure expectations theory postulates that no

Q6: The basic principle underlying the bootstrapping technique

Q7: The theory which adopts the view that

Q8: The relationship between yield and maturity is

Q9: The risks that cause uncertainty about the

Q10: Treasury securities are free of:<br>A) Price risk.<br>B)

Q11: The yield of bonds of the same

Examlex

ExamLex

About UsContact UsPerks CenterHomeschoolingTest Prep

Work With Us

Campus RepresentativeInfluencers

Links

FaqPricingChrome Extension

Download The App

Get App StoreGet Google Play

Policies

Privacy PolicyTerms of ServiceHonor CodeCommunity Guidelines

Scan To Download

qr-code

Copyright © (2025) ExamLex LLC.

Privacy PolicyTerms Of ServiceHonor CodeCommunity Guidelines