If Issuers of Securities (Borrowers)and Investors Suddenly Expect Interest Rates

question 66

Multiple Choice

If issuers of securities (borrowers) and investors suddenly expect interest rates to decrease, their actions to benefit from their expectations should cause

• A)long-term yields to rise.
• B)short-term yields to decrease.
• C)prices of long-term securities to decrease.
• D)long-term yields to rise AND short-term yields to decrease.
• E)None of these are correct.