The Demand for Bonds Curve Slopes Downwards Because

question 174

Multiple Choice

The demand for bonds curve slopes downwards because

• A) at higher prices, bonds pay higher interest which makes them more attractive to buyers.
• B) lower prices reduce the cost of borrowing which makes them less attractive to buyers.
• C) at lower prices, bonds pay higher interest which makes them more attractive to buyers.
• D) higher prices raise the cost of borrowing which makes them less attractive to buyers.

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Definitions:

Attract Capital

Strategies or actions taken by businesses to draw in investment funds from outside sources.

Fiduciary Duty

An obligation to act in the best interest of another party, such as a trustee for a beneficiary, including acting with loyalty and care.

Partnership

A business organization in which two or more individuals manage and operate the business in accordance with the terms and objectives set out in a Partnership Agreement.

Limited Liability Company

A Limited Liability Company (LLC) is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.