• Is the route that market prices followed or are expected to follow.
| ||Embedded terms in definition|
| ||Market prices|
| ||Referenced Terms|
| ||Preferred habitat theory: A biased expectations theory that believes the term structure reflects the expectation of the future Path of interest rates as well as risk premium. However, the theory rejects the assertion that the risk premium must rise uniformly with maturity. Instead, to the extent that the demand for and supply of funds does not match for a given maturity range, some participants will shift to maturities showing the opposite imbalances. As long as such investors are compensated by an appropriate risk premium whose magnitude will reflect the extent of aversion to either price or reinvestment risk.|
| ||Scenarios: Are hypothetical outcomes or Path dependent behavior for trading, hedging or analytical purposes.|
| ||Related Terms|
| ||Path dependent|
Path dependent option
Getting Your Finances Ready for Your Golden Years: If you're seriously considering retirement, you also should be seriously thinking about how to ensure that your financial life is as comfortable and stress-free as possible. Here are a few tips. More...
The way to develop self-confidence is to do the thing you fear and get a record of successful experiences behind you. Destiny is not a matter of chance, it is a matter of choice; it is not a thing to be waited for, it is a thing to be achieved. – William Jennings Bryan