When the economy is moving toward a recession, the yield on riskier bonds will tend to
A) rise.
B) fall.
C) stagnate.
D) become volatile.

Question

Quizplus · Accepted Answer

When the economy is moving toward a recession, investors tend to move their money to safer assets, causing the demand for riskier bonds to decrease. As a result, the yield on these bonds must rise to attract investors, reflecting the increased risk of default associated with economic downturns.

When the Economy Is Moving Toward a Recession, the Yield