The term structure of interest rates
A. shows the relative interest spread bonds with different risk ratings such as AAA, AA, A, BBB, etc.
B. changes daily to reflect current competitive conditions in the money and capital markets.
C. plots returns for securities of different risk
D. depicts interest rates for T-bills over the last year.
Some analysts believe that the term structure of interest rates is determined by the behavior of various types of financial instiutions. This theory is called the
A. liquidity premium theory
B. expectations hypothesis
C. market segmentation theory
D. theory of industry supply and demand for bonds.
