Everything Else Held Constant,when Bonds Become Less Widely Traded,and as a Consequence

question 164

Multiple Choice

Everything else held constant,when bonds become less widely traded,and as a consequence the market becomes less liquid,the demand curve for bonds shifts to the ________ and the interest rate ________.

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

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Definitions:

Managed Mutual Funds

Investment funds that are operated by professional fund managers who allocate the fund's investments and attempt to produce capital gains for the fund's investors.

Stock Index

A measure designed to track the performance of a group of stocks, representing a specific segment of the market.

Random Walk

A theory in finance suggesting that stock market prices follow an unpredictable path, making it impossible to predict future movements based on past trends.