The Segmented Markets Theory of Term Structure

Multiple Choice

The segmented markets theory of term structure:

A) explains upward-sloping yield curves as a result of the demand for long-term bonds being high, relative to the demand for short-term bonds.
B) explains upward-sloping yield curves as a result of the demand for long-term bonds being low, relative to the demand for short-term bonds.
C) explains upward-sloping yield curves as a result of the favourable tax treatment of long-term bonds.
D) is unable to explain upward-sloping yield curves.