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4 pts Question 13 If bond demand increases, yields will increase. remain constant. decrease. It depends... None of the above.
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If bond demand increases there will be decrease in the yield.

While understanding bond yields , it is necessary to understand that bond prices and bond yields are inversely related.When bond prices are going up , bond yields are going down and when bond prices are going down , bond yields are going up.If there is an increase in the demand for bonds , bond prices will go up .If bond prices go up , there will be decrease in the yield.Thus if there is increase in the demand for bonds which may be because stock investors are worried about the safety of their investments and take decision to invest on bonds,prices of bonds will rise and as a result yield from bonds will fall.

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