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Explain a flat yield curve using the segmented market theory.
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- Explain an upward sloping yield curve using the pure expectation theory.There are three explanations for the shape of the yield curve i.e. Unbiased expectations theory, Liquidity theory, and Market segmentation theory. Please Discuss each one and compare them.Define semistrong form of market efficiency
- 1. Under which of the following term structure theories is market supply and demand the main cause of yields? A. Local expectations B. Segmented markets C. Liquidity preference D. Preferred habitatwhy investors track moves in the yield curve?Describe what the zero-coupon yield curve measures. Quickly sketch what you expect the likely shape of this curve to be in normal economic conditions, and explain why.
- What is a yield curve? What does it mean when the yield curve is inverted?Compare and contrast the Spot market versus the Future market give examples.What is the difference between the ratios that use the market price and the other ratios? Why might you get a different picture about firm performance from the different ratio types? Describe a specific scenario where this might occur.