The terrorist attack on the World Trade Center on September 11, 2001:
A) triggered a flight to quality in the bond market.
B) caused the demand for U.S. Treasury securities to fall and the demand for corporate bonds to rise.
C) caused the price of U.S. Treasury securities to fall and the yields on corporate bonds to fall.
D) did not have any significant impact since the risk on all bonds increased.

Question

Quizplus · Accepted Answer

The terrorist attack on September 11, 2001, led to a "flight to quality" in the bond market, where investors moved their money to safer assets, such as U.S. Treasury securities, due to increased uncertainty and risk aversion, causing their prices to rise and yields to fall.

The Terrorist Attack on the World Trade Center on September