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Financial Markets and Institutions, 7e (Mishkin)
Chapter 4 Why Do Interest Rates Change?
4.1 Multiple Choice
1) As the price of a bond ________ and the expected return ________, bonds become more attractive to investors and the quantity demanded rises.
A) falls; rises
B) falls; falls
C) rises; rises
D) rises; falls
Answer: A
2) The supply curve for bonds has the usual upward slope, indicating that as the price ________, ceteris paribus, the ________ increases.
A) falls; supply
B) falls; quantity supplied
C) rises; supply
D) rises; quantity supplied
Answer: D
3) When the price of a bond
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