Holding the Expected Return on Bonds Constant,an Increase in the Expected

question 148

Multiple Choice

Holding the expected return on bonds constant,an increase in the expected return on common stocks would ________ the demand for bonds,shifting the demand curve to the ________.

• A)decrease;left
• B)decrease;right
• C)increase;left
• D)increase;right

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Definitions:

Future Values

The projected amount of money or value of an investment at a specified future date, accounting for factors like interest rates and returns.

Investment 1

The strategy of apportioning capital with the expectation of generating financial returns.

Compounded Quarterly

Describes the frequency with which interest is added to the principal balance of a loan or deposit four times a year, increasing the total amount of interest earned or paid.

Maturity Value

The amount payable to the investor at the end of a fixed-term investment, including both the principal and the interest.