Factors That Cause the Demand Curve for Bonds to Shift

question 96

Multiple Choice

Factors that cause the demand curve for bonds to shift to the left include

• A) a decrease in the inflation rate.
• B) an increase in the volatility of stock prices.
• C) an increase in the liquidity of stocks.
• D) all of the above.
• E) only A and B of the above.

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Definitions:

Tax Provision

An amount recorded in advance for expected future tax payments due to governmental regulations and business operations.

Interperiod Tax Allocation

The practice of distributing income tax expenses over different accounting periods to match taxes with the revenues they are associated with.

Book Income

The income reported by a company in its financial statements, differing from taxable income due to various adjustments.

Life Insurance Premiums

Regular payments made to an insurance company to maintain a life insurance policy.