In 2016,as investors became more concerned with the default risk of bonds issued by the governments of Greece and Portugal relative to the default risk on bonds issued by the governments of Germany,France,and the Netherlands,the price of bonds issued by Greece and Portugal would have most likely ________ and the yield on those bonds would have most likely ________.
A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased

Question

Quizplus · Accepted Answer

When investors perceive a higher default risk on bonds, the prices of those bonds typically decrease because they become less attractive to hold, leading investors to demand a higher yield to compensate for the increased risk.

In 2016,as Investors Became More Concerned with the Default Risk