Investors decided to sell their holdings of capital stock

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Suppose investors decided to sell their holdings of capital stock in order to purchase outstanding bonds payable and as a result, the prices of bonds payable increased. What would be the likely impact on market interest rates?

a) Market interest rates will be unaffected.

b) Market interest rates will increase.

c) Market interest rates will fall.

d) Although interest rates will change, it is impossible to predict the direction of change.

Reference no: EM13967379

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