Theories of the term structure, Financial Management

There are two important term structure theories related to the shapes of the yield curve. First is the Expectations Theory and the second is Market Segmentations Theory.

First, let us look at the expectations theory, which has several forms like pure expectations theory, liquidity theory and preferred habitat theory. Let us look into each theory one by one.

Figure: Term Structure Theories 

2154_theories of term sructure.png

Posted Date: 9/10/2012 3:35:07 AM | Location : United States







Related Discussions:- Theories of the term structure, Assignment Help, Ask Question on Theories of the term structure, Get Answer, Expert's Help, Theories of the term structure Discussions

Write discussion on Theories of the term structure
Your posts are moderated
Related Questions
TAGNA (a) Market effectiveness is commonly discussed in terms of pricing efficiency. A stock market is expressed as efficient when share prices fully and fairly reflect relevan

Q. What do you signify by Investment Decisions? Investment Decision: - The most significant function of financial management isn't only the procurement of external funds for th

What is capital rationing?  Should a firm practice capital rationing?  Why? The term Capital rationing is the practice of setting dollar limits on what will be invested in new ca

Extent of Financing Required It is clear that sales are unsure with low, high and medium estimates of demand. This of itself gives a few uncertainty but the reliability and pr

What is Share exchange    Predator company offers their shares in exchange for target company's shares. So target shareholders become part of predator shareholders and so have

Dividend cover Dividend cover measures the relationship among earnings per share and net dividends per share. The higher the altitude of dividends for any given level of EPS t

A mortgage-backed security is a debt and a kind of security that is backed by a pool of mortgages or a credit support from another party to a transaction. T

Public Financial Statements of a Company The final exercise is the valuation of a publicly held company's equity. You must base your valuation on the company's public financia

Q. What do you mean by a Hedge Fund? A Hedge Fund is a fund established by one or else several partners with net worth of at least $1 million (although this maybe falling). It

As an investor, what factors would you consider before investing in the emerging stock market of a developing country? Answer:  An investor in emerging market stocks requirements