Market segmentation theory,
Definition of Market segmentation theory:
Interest rate theory which shows that there is basically no correlation between short and long term interest rates. In addition, each category with different maturities has its own fluctuations in interest rates based on supply and demand and also on security risks.
The main implication of this theory is that the maturity category of each market / debt is determined by the supply and demand forces of supply, and the return of one maturity category is used to predict the return of another class of debt. Can't be . Maturity
The theory of market division is a theory that short and long term interest rates are irrelevant. He also said that current interest rates on short, medium and long term bonds should be seen as a separate factor in different securities markets.
How to use Market segmentation theory in a sentence?
- The market segmentation theory argues that short- and long-term interest rates are irrelevant because they have different investors.
- The preferred habit theory relates to market segmentation theory, which states that investors prefer to stay within their maturity because of guaranteed returns. Any movement into another drainage area is considered a hazard.
Meaning of Market segmentation theory & Market segmentation theory Definition