If prices in the bond market become more volatile,everything else held constant,the demand curve for bonds shifts ________ and interest rates ________.
A)left;rise
B)left;fall
C)right;rise
D)right;fall

Question

Quizplus · Accepted Answer

When bond prices become more volatile, investors perceive them as riskier. This decreases the demand for bonds, shifting the demand curve to the left. As demand decreases, the price of bonds falls, causing interest rates, which move inversely to bond prices, to rise.

If Prices in the Bond Market Become More Volatile,everything Else