Demand For Bonds Decreases In Travis
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State:
Multi-State
County:
Travis
Control #:
US-00415BG
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A Bond is a document with which one party promises to pay another within a specified amount of time. The term "demand" means that the principal plus any interest is due on demand by the bondholder rather than on a specific date. Bonds are used for many things, including borrowing money or guaranteeing payment of money. A bond can be given to secure performance of particular obligations, including the payment of money, or for purposes of indemnification. The validity of a "private" bond, payable upon demand, is determined by the same principles applicable to contracts generally. The purpose of the bond must not be contrary to public policy; it must be supported by a valuable consideration; and there must be a clear designation of the obligor and the obligee. A bond procured through fraud or duress may be unenforceable, but mistake on the part of the obligor as to the contents of a bond, or its legal effect, is not a defense to enforcement of the bond.
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When an economy grows out of a recession, normally the demand for bonds ______ and the supply of bonds ______, everything else held constant. Bonds have an inverse relationship to interest rates.When interest rates rise, bond prices usually fall, and vice-versa. An increase in the expected return on bonds causes the _____ bonds to shift and equilibrium interest rates to _____. A. demand for, rise B. supply of, fall As demand for bonds increases, so do bond prices and bondholder returns. The many different kinds of bonds. In a recession, when income and wealth are falling, the demand for bonds falls, i.e. , the demand curve shifts to the left. Learn about the relationship between bond prices and interest rates.
