1. Under which conditions will an investor demand a larger return (yield) on a bond?

A. The bond issue is upgraded from A to AA.

B. The bond issue is downgraded from A to BBB.

C. None of these conditions will cause an increase in the bond's yield.

D. Interest rates decrease due to a decline in inflation.

2. The main two sources of the time value of money are:

A. Interest Rates and Risk

B. Inflation and Interest Rates

C. Risk and timing of Consumption

D. Inflation and timing of Consumption.

Can someone please also let me know why the answer is correct? I have been straining my brain to figure these two out. Thanks!