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I chosed the third answer and don’t understand why it should be the first one. The standard answer doesn’t explain it much, could you please explain it for me? I truly apologise if this is a stupid question but please help me!
With higher risk the investors require a higher return.
The higher the required return then the lower will be the market value.
Oh right! and the market value (of the irredeemable security paying a fixes rate of interest) here shoud (= Interest/asked rate of return) right? just to make sure!
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