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8. Label the SUPPLY and DEMAND curves below. In the charts, show what happens if the default risk on corporate bonds DECREASES. Make sure you
8. Label the SUPPLY and DEMAND curves below. In the charts, show what happens if the default risk on corporate bonds DECREASES. Make sure you show what happens in the Corporate Bond Market and the effects on the Treasury Bond Market (i.e what happens to prices and required rate in each market. Make sure you describe the corresponding change in risk premium). CORPORATE BOND MARKET TREASURY BOND MARKET Price Price Quantity of Corporate Bonds Quantity of Treasury Bonds a. Based on your knowledge of the economy, what is currently going on the US Treasury Bond Market? (i.e. what's going on with the US treasury bonds' prices and required rates? 8. Label the SUPPLY and DEMAND curves below. In the charts, show what happens if the default risk on corporate bonds DECREASES. Make sure you show what happens in the Corporate Bond Market and the effects on the Treasury Bond Market (i.e what happens to prices and required rate in each market. Make sure you describe the corresponding change in risk premium). CORPORATE BOND MARKET TREASURY BOND MARKET Price Price Quantity of Corporate Bonds Quantity of Treasury Bonds a. Based on your knowledge of the economy, what is currently going on the US Treasury Bond Market? (i.e. what's going on with the US treasury bonds' prices and required rates
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