Other things being equal,an increase in the default risk of corporate bonds shifts the demand curve for corporate bonds to the ________ and the demand curve for Treasury bonds to the ________.
A)right;right
B)right;left
C)left;right
D)left;left

Question

Quizplus · Accepted Answer

An increase in default risk of corporate bonds would make investors less willing to demand them, shifting the demand curve for corporate bonds to the left. At the same time, investors may seek safer investments, such as government securities, increasing the demand for Treasury bonds and shifting their demand curve to the right.

Other Things Being Equal,an Increase in the Default Risk of Corporate