As General Business Conditions Deteriorate, All Other Factors Constant

question 105

Multiple Choice

As general business conditions deteriorate, all other factors constant:

• A) the demand for bonds will decrease.
• B) the supply of bonds will increase.
• C) bond prices will decrease.
• D) bond yields will increase.

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Definitions:

Strike Price

The fixed price at which the holder of an option can buy (call option) or sell (put option) the underlying security or commodity.

Call Options

Financial contracts that give the buyer the right, but not the obligation, to buy an underlying asset at a specified price within a certain time period.

Volatile

Characterized by or subject to rapid or unexpected changes, especially in the context of financial markets or securities prices.

Call Option

A financial contract that gives the buyer the right, but not the obligation, to buy an asset at a specified price within a specific time period.