Question: **I only need help with the graph. The first question has been answered correctly** Assume that a bond had its rating lowered. What is the
Assume that a bond had its rating lowered. What is the likely effect on this bond in the bond market? E1 Demand for the bond will decrease. OB Demand for the bond will remain the same OC. Demand for the bond will increase. On Demand for the bond cannot be determined without the bond rating Using the graph to the right, show the effect on a bond that has its roting lowered 1) Using the line drawing tool, draw a new curve. Properly label your curve 2) Using the point drawing tool, locate the new equilibrium price of the bond after the rating is lowered. Labet your point'E Carefully follow the instructions above, and only draw the required objects Price of bonds Quantity of bonds
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
