Everything Else Held Constant,when Stock Prices Become Less Volatile,the Demand

question 130

Multiple Choice

Everything else held constant,when stock prices become less volatile,the demand curve for bonds shifts to the ________ and the interest rate ________.

• A)right;rises
• B)right;falls
• C)left;falls
• D)left;rises

---

Definitions:

Acid-Test Ratio

A financial metric that measures a company's ability to pay its short-term liabilities with its quick assets (cash, marketable securities, and receivables).

Prepaid Expenses

Expenses paid in advance for goods or services to be received in the future, recognized as assets on a company's balance sheet until they are consumed or used.

Current Liabilities

Short-term financial obligations that are due within one year or within a normal operating cycle.

Stockholders' Equity

Represents the equity stake currently held by all shareholders of a company, calculated as the total assets minus total liabilities.