Which of the following is a possible outcome of a fall in the demand for a security?
A)It will lead to an increase in the price and the yield to maturity of the security.
B)It will lead to an increase in the price of the security and a fall in its yield to maturity.
C)It will lead to a fall in the price of the security and a fall in its yield to maturity.
D)It will lead to a fall in the price of the security and an increase in its yield to maturity.

Question

​Which of the following is a possible outcome of a fall in the demand for a security?
A)​It will lead to an increase in the price and the yield to maturity of the security.
B)​It will lead to an increase in the price of the security and a fall in its yield to maturity.
C)​It will lead to a fall in the price of the security and a fall in its yield to maturity.
D)​It will lead to a fall in the price of the security and an increase in its yield to maturity.

Quizplus · Accepted Answer

A fall in demand for a security will result in excess supply, which will lead to a fall in the price of the security. As price and yield have an inverse relationship, the fall in price will cause an increase in the yield to maturity of the security. Therefore, option D is the correct outcome.

​Which of the Following Is a Possible Outcome of a Fall

Which of the Following Is a Possible Outcome of a Fall