Asked by Alyssa Currie on Jun 15, 2024
Verified
If the Fed sells securities on the open market,bond prices will tend to ____ and interest rates will tend to ____.
Securities
Financial instruments that represent an ownership position in publicly-traded corporations (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.
Bond Prices
are the market value of bonds, which inversely correlate with interest rates; when rates go up, bond prices typically go down, and vice versa.
Interest Rates
The proportion of a total amount of money that is levied for its utilization, typically stated on a yearly basis.
- Analyze the effects of open market operations on bond prices and interest rates.
Verified Answer
KC
Learning Objectives
- Analyze the effects of open market operations on bond prices and interest rates.