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Liquidity preference hypothesis |
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Liquidity preference hypothesisThe argument that greater liquidity is valuable, all else equal. Also, the theory that the forward rate exceeds expected future interest rates.Liquidity preference hypothesis Similar MatchesRevealed preferenceRevealed preferenceThe use of the value of expenditure to "reveal" the preference of a consumer or group of consumers for the bundle of goods they purchase compared to other bundles of equal or smaller value. Used by Samuelson (1939) and Ohyama (1972), especially, to examine the gains from trade. Preference sharesPreference sharesShares in a company which give their holders an entitlement to a fixed dividend but which do not usually carry voting rights. The important difference between preference and ordinary shares are:The dividend on ordinary shares is uncertain and variable (high when the company does well, poor or non-existent when it does badly). Preference shareholders get a fixed dividend which, if not paid, usually accrues until it can be.Each ordinary share usually carries a vote. Preference shares do not usually carry a vote unless dividends fall into arrears.In the event of a winding up, preference shares are usually repayable at par value, and rank above the claims of ordinary shareholders (but behind bank and trade creditors).Preference shares may be issued with the right of conversion into ordinary shares. These are called convertibles. Identical preferencesIdentical preferencesThe assumption that individuals -- either within a country or in different countries -- have the same preferences. To be useful, since individuals' and countries' incomes may differ, the assumption is often used together with homothetic preferences. Preference sharePreference sharePreferred shares of a corporation that have first claim to preferred dividends. Loan Preference PrincipleLoan Preference PrincipleThe theory that a covered loan is less expensive when its cost is calculated in one currency, it will also be less expensive in all other currencies. Further Suggestionsparticipating preference sharesPreferences Community preferences Generalized System of Preferences Preference stock Tax preference item stepped preference shares Involuntary liquidation preference cumulative preference shares Homothetic preferences Weak axiom of revealed preference redeemable preference shares Preference for variety Tariff preference |
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