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
Discuss the three main trends which have prevailed in international business throughout the last two decades. The 1980s brought a fast integration of financial markets and inter

Yang Su is considering the following information on two stocks:                                                                              Rate of Return State of Economy

A Certificate of Deposit (CD) can be defined as a negotiable promissory note, secure and short-term in nature. CDs are issued at a discount to the face value, the

Financial management is that division of managerial process which is concerned with the planning and controlling of firm's financial resources. It is concerned with the procurement

Which type of financing is appropriate to each firm?

GENERAL FUNCTIONS Several functions of financial management currently range from planning of funds to distribution of earnings and also are extend beyond.  Some of the well-kn

A callable bond is the sale of a call option by the investor to the issuer as it allows the issuer to repurchase the bond from the time it becomes callable until

What are the benefits of investing via international mutual funds? Answer:  The benefits of investing via international mutual funds consist of: (a) Save transaction or info

What is the difference between the Euronote market, the Euro-medium-term-note market, and the Eurocommercial paper market? Answer:  Euronotes are short-term notes guarantees by

7. Bill Peters is the investment officer of a $60 million pension fund. He has become concerned about the big price swings that have occurred lately in the fund’s fixed income sec