- This topic has 8 replies, 8 voices, and was last updated Jan-1810:54 am by
.
-
Posts
-
-
Up3
How are upward-sloping yield curves explained by the Pure Expectations Theory?
- There are separate markets for long-term and short-term securities, and the
long-term market demands greater returns. - Future interest rates are expected to rise.
- Investors in long-term securities demand a risk premium for tying their
money up longer.
- There are separate markets for long-term and short-term securities, and the
-
Up5
i didn’t see it in élan guides. my guess is its not that important in terms of the exam but may be good to know
-
Up4
yeah, got no recollection of this either 🙁
-
Up4
Boo! I got it wrong. :neutral_face:
-
Up4
I swear KS notes don’t mention this one bit.
-
Up3
The three major term structure theories are summarized below from the perspective of an upward-sloping yield curve:
- Pure Expectations Theory – Future interest rates are expected to rise.
- Liquidity Preference Theory – Investors in long-term securities demand a risk premium for tying their money up longer.
- Market Segmentation Theory – There are separate markets for long-term and short-term securities, and the long-term market demands greater returns.
-
Up2
Thought i had done with Fixed income…then i saw this question…:)
can anyone let know where in CFA curriculum i can find the above details… -
Up2
Yea, I didn’t see this in the Fixed Income section. I am trying to search for it in Econ as I think it might be there.
-
Up2
Thanks for posting this! I had no clue. I’m glad I ran into this. It is good review.
-
- You must be logged in to reply to this topic.