A decrease in the riskiness of corporate bonds will ________ the price of corporate bonds and ________ the price of Treasury bonds,everything else held constant.
A)increase;increase
B)reduce;reduce
C)reduce;increase
D)increase;reduce

Question

Quizplus · Accepted Answer

A decrease in the riskiness of corporate bonds makes them more attractive to investors, leading to an increase in their price due to higher demand. Conversely, as investors shift towards corporate bonds, the demand for Treasury bonds may decrease, leading to a reduction in their price.

A Decrease in the Riskiness of Corporate Bonds Will ________