ACI
3I0-012 · Question #83
The Market Segmentation hypothesis suggests that the yield curve bends at some point along its length because:
The correct answer is C. Different types of institution tend to specialize in different maturity ranges. See the full explanation below for the reasoning.
Question
The Market Segmentation hypothesis suggests that the yield curve bends at some point along its length because:
Options
- AInvestors have less appetite for longer-term investments
- BBorrowers prefer to borrow long-term but lenders prefer to lend short-term
- CDifferent types of institution tend to specialize in different maturity ranges
- DThe risk premium becomes significant only at longer maturities
How the community answered
(39 responses)- A8% (3)
- B5% (2)
- C72% (28)
- D15% (6)
Community Discussion
No community discussion yet for this question.