Which of the following statements is CORRECT other things held constant a If

Which of the following statements is correct other

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10. Which of the following statements is CORRECT, other things held constant? a.If companies have fewer good investment opportunities, interest rates are likely toincrease.b.If individuals increase their savings rate, interest rates are likely to increase.c.If expected inflation increases, interest rates are likely to increase.d.Interest rates on all debt securities tend to rise during recessions because recessions increase the possibility of bankruptcy, hence the riskiness of all debt securities.e.Interest rates on long-term bonds are more volatile than rates on short-term debt securities like T-bills. Chapter 6 Adaptive Test Prep (Multiple Choice ONLY) 1.Which of the following statements about bond markets is CORRECT? 2.Which of the following statements about interest rates is CORRECT, all other things heldconstant?
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3.Apply the pure expectations theory to the following: Assume that the real risk-free rate ofinterest is expected to remain constant at 3% for the foreseeable future but that inflation is expected to increase steadily over the next 30 years, giving the Treasury yield curve an upward slope. You are considering two corporate bonds, one with a 5-year maturity and one with a 10-year maturity, both of which have the same default and liquidity risks. Again, assuming the pure expectation theory holds, which of these statements is CORRECT?
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