If We Observe That Many Investors Are Selling Bond a and Buying

question 123

Multiple Choice

If we observe that many investors are selling Bond A and buying a similar Bond B, this suggests that the expected returns on:

• A) Bond A will start falling
• B) Bond B will start rising
• C) Bond A was higher than that of Bond B
• D) Bond A will start rising

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Definitions:

Extinction

In behavioral psychology, the gradual weakening and disappearance of a conditioned response when the reinforcement is no longer presented.

Dangerous Pranks

Actions intended to be humorous or playful but carry a high risk of causing harm or damage.

Praise

The expression of approval or admiration for someone or something, often used as a form of encouragement.

Positive Reinforcement

A process in psychology where a behavior is followed by a reward or positive outcome, encouraging that behavior to be repeated in the future.