n NISM Certifications
XVII NISM Series XVII
Medium

What is the likely effect on existing debt investments when the government borrows heavily to bridge a fiscal deficit?

Practice question from NISM Series XVII- Retirement Adviser Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Negative, bond prices fall as yields increase

    Correct answer

  2. B

    Positive, yields increase and benefit new investors

  3. C

    Positive, more participation in the market due to higher yields

  4. D

    Neutral, no impact on existing investments

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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