-In the Figure Above, the Price of Bonds Would Fall

question 93

Multiple Choice

-In the figure above, the price of bonds would fall from P₂ to P₁ if ________.

• A)there is a business cycle recession
• B)there is a business cycle expansion
• C)inflation is expected to increase in the future
• D)inflation is expected to decrease in the future

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Definitions:

Expected Returns

The profit or loss an investor anticipates on an investment that has various known or predictable rates of return.

Standard Deviation

A statistical measure of the dispersion or variability in a set of data points, often used in finance to quantify the volatility of an investment.

Return

The increase or decrease in value of an investment during a set period, represented as a percentage of the investment's starting price.

S&P/TSX Composite Index

A market index representing the performance of the Canadian stock market, compiled by the Standard & Poor’s company.