(I)An Increase in Default Risk on Corporate Bonds Shifts the Demand

question 60

Multiple Choice

(I) An increase in default risk on corporate bonds shifts the demand curve for corporate bonds to the left.
(II) An increase in default risk on corporate bonds shifts the demand curve for Treasury bonds to the right.

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

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Definitions:

Potentially Functional

Describes something that may serve a purpose or be useful in some way, though it may not currently be in operation or use.

Dysfunctional

Behaviors or characteristics that negatively impact the functioning of an individual, group, or organization, often leading to decreased performance or well-being.

Behaviours

Actions or reactions of individuals, often in response to external stimuli, that can be observed and measured.

Goal Challenge

The degree of difficulty and the effort required to achieve a specific goal, which can influence motivation and performance.