Question

Describe one factor for each of the following and what the impact would be on bond prices and interest rates
1.Increase in supply for bonds
2.Increase in the demand for bonds
3.Decrease in the supply for bonds
4.Decrease in the demand for bonds

Answer 1

What would be the impact on bond prices and interest rates?
1.Increase in supply for bonds will cause decrease of bond prices and increase of the interest rates.
2.Increase in the demand for bonds will cause increase of bond prices and decrease of the interest rates.
3.Decrease in the supply for bonds will cause increase of bond prices and decrease of the interest rates.
4.Decrease in the demand for bonds will cause decrease of bond prices and increase of the interest rates.