What are factors influenced the shape of the yield curve, Financial Management

Assignment Help:

What are number of factors that influence the shape of the yield curve?

There are some of factors which influence the shape of the yield curve as follows:

(1) Expectations theory

The expectations theory of the term structure of interest rates specifies into equilibrium.

(2) Liquidity premium theory

Liquidity premium theory asserts, which in a world of uncertainty, lenders and investors will wish to hold assets that can be converted in cash speedily.

(3) Market segmentation

The expectations of investors are regarding the future interest rates and their preferences for liquidity as the market segmentation theory.


Related Discussions:- What are factors influenced the shape of the yield curve

Explain why warrants are rarely exercised, Explain why warrants are rarely ...

Explain why warrants are rarely exercised unless the time to maturity is small? Warrants are hardly ever exercised until the time to expiration is small because the market pric

Define capital rationing, What is capital rationing?  Should a firm practic...

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

Types of government stocks, Types of Government Stocks Issue of Stock t...

Types of Government Stocks Issue of Stock through AuctionThe RBI, on behalf of the government, issues notification to auction government securities, stating the amount and time

Step-up (step down) notes, These types of securities have more ...

These types of securities have more than one coupon rate and each subsequent coupon rate is higher (or lower) than the previous coupon rate. For

Operational rules for financial management, Operational Rules for Financial...

Operational Rules for Financial Management Besides features, certain operational rules are established as to the subsequent: 1) While revenue and expenses are reported;

Show the advantages of adjusted discount rate, Q. Show the Advantages of ad...

Q. Show the Advantages of adjusted discount rate? Advantages:- (1) It is simple to understand and simple to calculate. (2) The risk premium rate comprised in the risk adj

Operating cycle, applicability of operating cycle in poultry

applicability of operating cycle in poultry

Yield curve strategies, Yield curve strategies take into account the ...

Yield curve strategies take into account the distribution of the maturities of the bonds of the portfolio in order to take advantage of the forecasted movements o

Conversion ratio, It is the number that tells how many common stock...

It is the number that tells how many common stocks (or preference stocks) will the bondholder receive at the time of conversion. It is usually constant over

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd