Your financial investments consistent of U.S. government bonds which mature in 20 years and share of stock in a technology company. How would you expect each of the following news items to affect the value of your assets? Explain.

a) Interest rates on newly issued government bonds fall

b) Inflation is forecasted to be much higher than expected (Assume that your bonds pay a set amount. Their payments are not affected by the inflation rate)

c) Below average stock market volatility reduce investors’ concerns about market risk

Answer rating: 100% (QA)

a Interest rates on newly issued government bonds fall When interest rates on newly issued governmen... View the full answer