university finance

In his 31 August 2021 article The rich get richer and rates get lower, Robert Armstrong states that "Savings chase returns, so when there are more savings and the same number of places to put them, ratesof return must fall" Market for Bond Contracts Market for Loanable Funds Bond price Interest rate at start ($/unit) or YTM (% pa) S1 S1 D Quantity of Quantity bond contracts of loanable (units) funds ($) if all savings (canable funch) are invested in fixed co ent and corporate bonds. this is equivalent to saying that an increase in Select one () a Demand for bonds results in higher bond prices ( b. Supply of bonds results in lower bond prices C. c Demand for loanable funds results in higher vistor-to-maturity ( d Demand for loanable funds results in lower yolds-to-man Supply of lovable funds results in higher yholds-to