Under Which Conditions Will an Investor Demand a Larger Return

question 124

Multiple Choice

Under which conditions will an investor demand a larger return (yield) on a bond?

• A) The bond issue is upgraded from A to AA.
• B) The bond issue is downgraded from A to BBB.
• C) Interest rates decrease due to decline in inflation.
• D) None of the conditions will cause an increase in the bond's yield.

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Definitions:

Nozzle

A device designed to control the direction or characteristics of a fluid flow (such as water or gas) as it exits an enclosure.

Reticular Activating System

A network of nerves in the brainstem that plays a key role in controlling arousal, wakefulness, and the transition between sleep and wakefulness.

Consciousness

The state of being awake and aware of one's surroundings, sensations, thoughts, and feelings.

Alertness

The state of being watchful and aware of one's surroundings, often taken as an indicator of cognitive function or consciousness level.