# Would You Be More Or Less Willing To Buy Long Term At Bonds Under The Following Circumstances

By this we mean that share prices change because of supply and demand. If more people want to buy a stock (demand) than sell it (supply), then the price moves up. Conversely, if more people wanted to sell a stock than buy it, there would be greater supply than demand, and the price would fall.

Question: Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: a. Trading in these bonds increases, …

Question: Would you be more or less willing to buy long-term Air Canada bonds under the following circumstances? Explain why for each case.

## What reasons can increase the demand for bonds?

The demand curve for bonds shifts due to changes in wealth, expected relative returns, risk, and liquidity. Wealth, returns, and liquidity are positively related to demand; risk is inversely related to demand. Wealth sets the general level of demand. Investors then trade off risk for returns and liquidity.

## How do long term bond yields affect stocks?

Bonds affect the stock market because when bonds go down, stock prices tend to go up. The opposite also happens: when bond prices go up, stock prices tend to go down. Bonds compete with stocks for investors’ dollars because bonds are often considered safer than stocks. However, bonds usually offer lower returns.

## What will happen to interest rates if prices in the bond market become more volatile?

What will happen to interest rates if prices in the bond market become more volatile? Bonds become riskier and the demand for bonds will fall, which causes interest rates to rise.

## What is the expected equilibrium price and quantity of bonds in this market?

What is the expected equilibrium price and quantity of bonds in this market? Solving for the equilibrium gives: -0.6xd7Quantity + 1,140 = Quantity + 700, 1.6xd7Quantity = 440, Quantity = 275. Using the bond supply equation: Price = 275 + 700, Price = 975.

## Will there be an effect on interest rates if brokerage commissions on stocks fall?

Terms in this set (10) Will there be an effect on interest rates if brokerage commissions on stocks fall? A-Yes, interest rates would rise because stocks become more liquid than before, which would reduce the demand for bonds.

## What would happen to the demand for Rembrandt paintings if the stock market undergoes a boom?

What would happen to the demand for Rembrandt paintings if the stock market undergoes a boom? The demand for Rembrandt paintings would increase because of the increase in people’s wealth.

## When the interest rate is above the equilibrium interest rate there is an excess?

2. Describe the process in the money market by which the interest rate reaches its equilibrium value if it starts above equilibrium. ANS: If the interest rate is above equilibrium, there is an excess supply of money.

## How do you predict if a stock will go down?

If the stock price falls, the short seller profits by buying the stock at the lower price–closing out the trade. The net difference between the sale and buy prices is settled with the broker. Although short-sellers are profiting from a declining price, they’re not taking your money when you lose on a stock sale.

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(Mishkin 5.4) Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: a. Trading in these bonds increases, making them easier to sell. b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions on stocks fall. d.

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Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: a. train in these bind increases, making them easier to sell b. you expect a bear market in stocks (stock prices are expected to decline) c. brokerage commissions on stocks fall. d. you expect interest rates to rise

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Would you be more or less willing to buy long-term Air Canada bonds under the following circumstances? a. Trading in these bonds increases, making them easier to sell. b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions on stocks fall. d. You expect interest rates to rise. e. Brokerage …

### Interest Rate Risk Between Long-Term and Short-Term Bonds

Mar 18, 2022Long-term bonds have a greater duration than short-term bonds. Duration measures the sensitivity of a bond’s price to changes in interest rates. For instance, a bond with a duration of 2.0 years…

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You would be less more willing to buy a share of Microsoft stock if prices in the bond market become more volatile because bonds have become relatively safer than stocks stocks have become relatively safer than bonds the returns on bonds have improved in value more stocks have become relatively safer than bonds

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Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: Trading in these bonds increases, making them easier to sell. You expect a bear market in stocks (stock prices are expected to decline). Brokerage commissions on stocks fall. You expect interest rates to rise. Brokerage commissions on …

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Explain why you would be more or less willing to buy long-term AT&T bonds under the following circum-stances: a. Trading in these bonds increases, making them easier to sell. b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions on stocks fall. d. You expect interest rates to rise. e. Brokerage …

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Explain why you would be more or less willing to buy long-term AT&T bonds under the following circum-stances: a. Trading in these bonds increases, making them easier to sell. b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions on stocks fall. d. You expect interest rates to rise. e. Brokerage …

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Question 5.4 – ANSWER • Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: – Trading in these bonds increases, making them easier to sell. • More (liquidity increases, which increases demand, increases price and lowers the interest rate on the bond).

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Show transcribed image text Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: a. Trading in these bonds increases, making them easier to sell. how Jup MO b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions

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Show transcribed image text 1. (Mishkin 5.4) Explain why you would be more or less willing to buy long-term AT&T bonds under the following circumstances: a. Trading in these bonds increases, making them easier to sell. b. You expect a bear market in stocks (stock prices are expected to decline). c. Brokerage commissions on stocks …

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