There are four theories that explain term structure of interest rates. These are1. Segmented market theory2. Expectations theory3. Liquidity premium theory4. Preferred habitat theoryWe can see the term structure by plotting a yield curve at a point in time. The general characteristics are determined as ascending, descending, or flat. (1)1. Segmented market theoryBasic notion of… Continue reading Evaluate the explanations for the term structure of interest rates