Preferred Habitat Theory

Business / Finance / 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. The theory rejects the assertion that the risk premium must rise uniformly with maturity, but instead profits that to the extent that the demand for and supply of funds do not match for a given maturity range, some participants will shift to maturities showing the opposite imbalances, as long as they are compensated by an appropriate risk premium whose magnitude will reflect the extent of aversion to either price or reinvestment risk.

Other Words for Habitat

Habitat Noun Synonyms: abode, home, haunt, domain, range, territory, bailiwick, realm, terrain, element, environment, surroundings, stamping-ground
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Expectations Theory Of Forward Exchange Rates

Business / Finance / Expectations Theory Of Forward Exchange Rates: Theories of the term structure of interest rates, which include the pure expectations theory; the liquidity theory of the term structure, and the preferred habitat theory. These theories hold that eac MORE

Preferred Provider Arrangement (PPA)

Health / Health Insurance / Preferred Provider Arrangement (PPA): As defined in state laws, a contract between a healthcare insurer and a healthcare provider or group of providers who agree to provide services to persons covered under the contract. Examples include MORE

Preferred Provider Organization (PPO)

Health / Health Insurance / Preferred Provider Organization (PPO): A healthcare benefit arrangement designed to supply services at a discounted cost by providing incentives for members to use designated healthcare providers (who contract with the PPO at a discount), MORE

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