Multiple Choice
Consider a supply and demand model of bonds for company X.Which of the following would one expect to happen if the default risk increases for company X?
A) The demand curve will shift to the right,causing the price of the bond to rise.
B) The demand curve will shift to the left,causing the price of the bond to rise.
C) The supply curve will shift to the right,causing the price of the bond to fall.
D) The demand curve will shift to the left,causing the price of the bond to fall.
E) The supply curve will shift to the left,causing the price of the bond to rise.
Correct Answer:
Verified
Correct Answer:
Verified
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