(I)If a Corporate Bond Becomes Less Liquid,the Demand for the Bond

question 66

Multiple Choice

(I) If a corporate bond becomes less liquid,the demand for the bond will fall,causing the interest rate to rise.
(II) If a corporate bond becomes less liquid,the demand for Treasury bonds does not change.

• A) (I) is true, (II) false.
• B) (I) is false, (II) true.
• C) Both are true.
• D) Both are false.

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