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Consider the Price Paid for Debt Issued by the State

Question 46

Multiple Choice

Consider the price paid for debt issued by the State of California. Which of the following would lead to a decrease in the value of State of California bonds?


A) The State of California bonds are in small dollar amounts.
B) The State of California bonds have a shorter maturity.
C) The State of California experiences a fiscal crisis that makes it less likely it will be able to honor its interest payments.
D) The State of California pays back its previous bonds ahead of schedule.

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