A bond's price would likely fall as a result of any of the following except contraction of the supply of loanable funds downgrade of the issuer's credit rating strengthening of the demand for loanable funds heavy Federal Reserve buying on the open market

A bond's price would likely fall as a result of any of the following except contraction of the supply of loanable funds downgrade of the issuer's credit rating strengthening of the demand for loanable funds heavy Federal Reserve buying on the open market

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter4: Bond Valuation

Section: Chapter Questions

Problem 2Q: Short-term interest rates are more volatile than long-term interest rates, so short-term bond prices...

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Concept explainers

Swaps

A swap is a derivative contract in which two parties are agreed to exchange their cash flows from two different financial instruments for a defined period. In swap contracts, cash flows from one financial instrument are fixed and cash flow from other financial instruments is variable based on the interest rate, exchange rate, and commodity price. Swap contracts are transacted in an over-the-counter system. Swap contracts are utilized to hedge risk and mitigate loss.

Question

A bond's price would likely fall as a result of any of the following except
contraction of the supply of loanable funds
downgrade of the issuer's credit rating
strengthening of the demand for loanable funds
heavy Federal Reserve buying on the open market
←

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