In 2003, Ratings Agencies Downgraded Bonds Issued by the State

Multiple Choice

In 2003, ratings agencies downgraded bonds issued by the State of California several times. How will this affect the market for these bonds?

A) Yields on these bonds will decrease and the yield on Treasury bonds will increase.
B) The yield on these bonds will not change, nor will the yield on Treasury bonds.
C) The yield on these bonds and on Treasury bonds will both decrease.
D) Yields on these bonds will increase.