Which of the following was an outcome of the announcement made by the U.S.government in October 2001 that it will stop selling 30-year bonds?
A)There was a sharp fall in the price of the securities and an increase in the yield to maturity.
B)There was a sharp rise in the price of the securities and a decline in the yield to maturity.
C)There was a sharp rise in the price of the securities and an increase in the yield to maturity.
D)There was a sharp fall in the price of the securities and a decline in the yield to maturity.

Question

Quizplus · Accepted Answer

When the U.S. government announced it would stop selling 30-year bonds, it led to a sharp rise in the price of existing 30-year bonds due to their increased scarcity and a corresponding decline in the yield to maturity, as bond prices and yields move inversely.

Which of the Following Was an Outcome of the Announcement