When Prices in the Stock Market Become More Uncertain,the Demand

question 17

Multiple Choice

When prices in the stock market become more uncertain,the demand curve for bonds shifts to the ________ and the interest rate ________.

• A) right; rises
• B) right; falls
• C) left; falls
• D) left; rises

---

Definitions:

Intrinsic Value

The actual, inherent value of an asset, independent of its market price.

Warrants

Financial derivatives that provide the right, but not the obligation, to buy or sell a security at a specific price before a certain date.

Security Offering

The process of making new shares of a company available for sale to the public or specific investors, often to raise capital.