Which of the following is most likely to occur immediately following the announcement that the rating on a corporate bond has been lowered to junk status?

Question

Quizplus · Accepted Answer

When a corporate bond's rating is lowered to junk status, the bond is considered to be riskier, and as a result, investors may demand a higher yield or return on their investment to compensate for the increased risk. This will lead to a decline in the price of the bond, as investors will be willing to pay less for the same amount of future cash flows.

Which of the Following Is Most Likely to Occur Immediately