Segmented market theory / Term structure of interest rates / Part 3

In this tutorial, we explain the segmented market theory (a.k.a, market segmentation theory), one of the main theories put forward to explain the term structure of interest rates.

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00:00 Intro
00:45 Understanding the segmented market theory
01:17 Comparison with the expectations hypothesis and liquidity preference theory
01:57 Visual depiction of market segmentation
03:13 Preferred habitats of investors
05:06 Investors’ reluctance to move across segments
06:42 Criticisms and limitations

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