3. Suppose that people in France decide to permanently increase their savings rate. Predict what will happen to the French bond market in the future. Can France expect higher or lower domestic interest rates?

3. Suppose that people in France decide to permanently increase their savings rate. Predict what will happen to the French bond market in the future. Can France expect higher or lower domestic interest rates?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Concept explainers

International Bonds

A bond is fixed-income security where a lender comes into a contract with the borrower. The borrower agrees to make payment and interest at a specified date in the future or on maturity period. It is a type of financing that helps to fulfill and meet obligations. Many people invest in bonds because it is a simple form of security.

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3. Suppose that people in France decide to permanently increase their savings rate.
Predict what will happen to the French bond market in the future. Can France expect
higher or lower domestic interest rates?

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