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

Question

Quizplus · Accepted Answer

An increase in the riskiness of corporate bonds makes them less attractive to investors, leading to a decrease in their price. Investors may seek safer investments like Canada bonds, increasing their demand and price.

An Increase in the Riskiness of Corporate Bonds Will ________