When Bonds Become More Widely Traded,and as a Consequence the Market

question 63

Multiple Choice

When bonds become more widely traded,and as a consequence the market becomes more 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:

Cash Receipts

The total amount of money received by a business during a specific period.

Interest and Dividends

Income received from investments, with interest earned on debt investments and dividends received from equity investments.

Operating Activities

Tasks and transactions directly related to the primary business functions of providing goods or services to customers.

Statement of Cash Flows

A financial statement that compiles total data about every cash inflow a business gets from its operational activities and external funding sources, in addition to all cash outflows that cover the costs of business operations and investments in a specified timeframe.