Under Which Conditions Will an Investor Demand a Larger Return

question 74

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 these conditions will cause an increase in the bond's yield.

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Definitions:

Internal Experience

A person's subjective and introspective reflection on their own thoughts, feelings, and sensations.

Inferiority Complex

A psychological condition in which a person feels a lack of self-esteem and doubts about their abilities, often unconsciously, leading to overcompensation or withdrawal.

Adler

Alfred Adler, an Austrian medical doctor and psychotherapist, known for his theory of individual psychology which emphasizes the importance of the feeling of inferiority and the striving for superiority.

Feelings of Inadequacy

Emotions that reflect a lack of confidence in one's abilities or worth.