FIN 534 RANK Imagine Your Future /fin534rank.com FIN 534 RANK Imagine Your Future /fin534rank.com | Page 41

Suppose the U.S. Treasury announces plans to issue $50 billion of new
bonds. Assuming the announcement was not expected, what effect,
other things held constant, would that have on bond prices and interest
rates?
1) Prices and interest rates would both rise.
2) Prices would rise and interest rates would decline.
3) Prices and interest rates would both decline.
4) There would be no changes in either prices or interest rates.
5) Prices would decline and interest rates would rise.
Question 7
Which of the following statements is CORRECT?
1) Corporations are at a disadvantage relative to partnerships becaus