In 2003, Ratings Agencies Downgraded Bonds Issued by the State

question 95

Multiple Choice

In 2003, ratings agencies downgraded bonds issued by the State of California several times. How will this affect the market for these bonds?

• A) Yields on these bonds will decrease and the yield on Treasury bonds will increase.
• B) The yield on these bonds will not change, nor will the yield on Treasury bonds.
• C) The yield on these bonds and on Treasury bonds will both decrease.
• D) Yields on these bonds will increase.

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Definitions:

Neutral Stimulus

A stimulus that initially produces no specific response other than focusing attention, until it is associated with a certain response through conditioning.

Classical Conditioning

A training method where two signals are consistently associated; the reaction initially triggered by the second signal is ultimately triggered by the first signal alone.

United Parcel Service

A multinational package delivery and supply chain management company, commonly known by the acronym UPS.

Behavioral Change

Behavioral change involves modifying or completely altering an individual's actions or reactions to meet certain objectives or improve well-being.