An aggregate purchase by investors of low-yield instruments in favor of high-yield instruments places ____ pressure on the yields of low-yield securities and ____ on the yields of high-yield securities.

Question

Quizplus · Accepted Answer

An aggregate purchase of low-yield instruments by investors results in increased demand for such securities, thereby leading to a decrease in their yields (downward pressure). Conversely, high-yield instruments that are now in relatively lower demand are likely to see an increase in their yields (upward pressure) in response to the investors' shift in preferences towards higher-yield securities.

An Aggregate Purchase by Investors of Low-Yield Instruments in Favor