Question: An increase in default risk on corporate bonds _____ the demand for these bonds and _____ the demand for default-free bonds? A. lowers; increases. B.

An increase in default risk on corporate bonds _____ the demand for these bonds and _____ the demand for default-free bonds?

A. lowers; increases.

B. does not change; greatly increases.

C. increases; lowers.

D.moderately lowers; does not change

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