Take advantage of low interest rates

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In this question, we are going to use the demand and supply model for bonds to understand more clearly what exactly is happening in the bond markets according to the following title of this WSJ article.

U.S. Bond Issuance Nears $1 Trillion

Companies Take Advantage of Low Interest Rates to Issue Bonds

a) Draw two bond demand - bond supply diagrams with the US Government Security market on the left-hand side and the corporate bond market on the right-hand side. Begin at a point A in both diagrams and then model the topic of this article which of course is that corporations are issuing massive amounts of bonds (near $1 trillion) to take advantage of low interest rates as point B (label the quantity of corporate bonds at point B as $1 trillion). Please explain exactly why

1) Investors are willing to buy more corporate bonds as well as

2) Why firms are willing to issue more corporate bonds.

Reference no: EM133130695

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