a) Corporations do not receive any funds from investors when their bonds are re-sold in a secondary market. Nonetheless
Posted: Sun Jun 05, 2022 4:55 pm
a) Corporations do not receive any funds from
investors when their bonds are re-sold in a secondary market.
Nonetheless corporations prefer that their bonds trade in a
secondary market that is more liquid rather than less liquid (or
“illiquid”). Explain why that is the case. No diagram is needed to
answer this question.
b) If investor’s
revise their expectations and now expect that Canada’s inflation
rate will increase over the next ten years, what impact will this
have on the slope of the yield curve? Briefly
explain.
investors when their bonds are re-sold in a secondary market.
Nonetheless corporations prefer that their bonds trade in a
secondary market that is more liquid rather than less liquid (or
“illiquid”). Explain why that is the case. No diagram is needed to
answer this question.
b) If investor’s
revise their expectations and now expect that Canada’s inflation
rate will increase over the next ten years, what impact will this
have on the slope of the yield curve? Briefly
explain.