How is the interest rate that prevails in the bond market determined?
A)by the interaction of stock prices and bond prices
B)by the decision of the president, in consultation with Congress
C)by the demand for and supply of bonds
D)by the Board of Governors of the New York Stock Exchange

Question

Quizplus · Accepted Answer

The interest rate prevailing in the bond market is determined by the demand for and supply of bonds. When demand for bonds is high, the interest rate tends to be lower, and vice versa. The supply of bonds is influenced by factors such as government and corporate borrowing needs and the overall economic conditions.

How Is the Interest Rate That Prevails in the Bond