Which of the Following Is True of the Market Segmentation

Multiple Choice

Which of the following is true of the market segmentation theory?

A) According to the market segmentation theory, the shape of the yield curve depends on investors' expectations about future inflation rates.
B) According to the market segmentation theory, the yield curve can only be upward sloping at any given time.
C) According to the market segmentation theory, lenders prefer to make short-term loans rather than long-term loans.
D) According to the market segmentation theory, the yield curve can only be flat at any given time.
E) According to the market segmentation theory, the slope of the yield curve depends on supply/demand conditions of a security in the long- and short-term markets.