An increase in interest rates shifts the supply curve of bonds to the right (increased supply) and decreases demand, leading to a lower equilibrium price for bonds.

The central bank buying bonds increases demand, shifting the demand curve to the right, leading to a higher equilibrium price for bonds and lower interest rates.

During a recession, demand for bonds typically increases as investors seek safer assets, shifting the demand curve to the right, leading to higher bond prices and lower interest rates.

Rising inflation expectations decrease the demand for bonds as investors anticipate higher interest rates, shifting the demand curve to the left, leading to lower bond prices and higher interest rates.

Increased government borrowing increases the supply of bonds, shifting the supply curve to the right, leading to lower bond prices and higher interest rates.

A decrease in the discount rate increases the money supply, leading to lower interest rates and increased demand for bonds, shifting the demand curve to the right and increasing bond prices.

Accelerated economic growth increases demand for loanable funds and decreases demand for bonds as investors seek riskier assets, leading to lower bond prices and higher interest rates.

A stock market crash increases demand for safer assets like bonds, shifting the demand curve to the right, leading to higher bond prices and lower interest rates.

The central bank selling bonds decreases the money supply, leading to higher interest rates and decreased demand for bonds, shifting the demand curve to the left and decreasing bond prices.

Increased consumer confidence leads to higher spending and decreased demand for bonds as investors seek riskier assets, leading to lower bond prices and higher interest rates.

Stocks generally have higher risk than bonds.

Stocks generally offer higher potential returns than bonds.

Stocks represent ownership in a company, while bonds represent a loan to a company or government.

Equity financing involves selling stocks, while debt financing involves issuing bonds.

Demand deposits are more liquid than bonds, as they can be accessed immediately, while bonds need to be sold.

Stocks may provide income through dividends, while bonds provide income through interest payments.

High liquidity assets (e.g., cash) can be quickly converted to cash, while low liquidity assets (e.g., real estate) take longer.

Bond prices are inversely related to interest rates, while stock prices are influenced by a wider range of factors including company performance and economic conditions.

Bondholders have a higher claim on a company's assets in bankruptcy than stockholders.

Stocks are generally more suitable for investors with a higher risk tolerance and longer time horizon, while bonds are more suitable for investors seeking stability and income.

Things that hold value, like cash, stocks, and bonds.

How easily an asset can be converted into cash.

The net gain or loss on an investment over time.

The chance that an investment's actual outcome differs from the expected one.

A security representing ownership in a company.

Companies sell stocks to raise capital, avoiding debt but sharing ownership.

An interest-bearing asset issued by businesses or governments.

Companies issue bonds to borrow money, promising to repay the principal plus interest.

Borrowing money and repaying it with interest.

Money in your checking account that you can access anytime.