Consider the factors that affect bond demand and bond supply. Describe how the following are likely to change during a recessionary period (your prediction of the likely outcome given COVID-19): wealth, default risk, and general business conditions. For each, state how the factor is likely to change, and discuss the implications for bond demand/supply, bond price, and yield. Bond prices tend to increase during recessions. What does this reveal about which of these factors is important? One of the top clients (XYZ Inc.) is coming to the presentation and is very interested in this because they have announced plans to weather the effects of the COVID-19 pandemic by issuing hundreds of millions of dollars of bonds. Discuss how the current stockholders of XYZ Inc. will feel about this plan?

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