Question

Which of the following factors do not generally

determine the demand for an asset:
a) wealth of investors
b) liquidity of bonds relative to alternative assets
c) expected returns on bonds relative to

Answer 1

The factors that do not generally determine the demand for an asset are wealth of investors, liquidity of bonds relative to alternative assets, and expected returns on bonds relative to alternative assets. The correct answer is option (a),(b) and (c).

Step-by-step explanation:

The factors that generally do not determine the demand for an asset are:

• Wealth of investors: The wealth of investors can influence their ability to invest in assets, but it does not determine the overall demand for an asset. Other factors such as expected returns and liquidity play a more significant role in determining demand.

• Liquidity of bonds relative to alternative assets: The liquidity of bonds can affect the demand for them, but it is not a factor that solely determines the demand for an asset. Investors consider a variety of factors, including risk and expected returns, when making investment decisions.

• Expected returns on bonds relative to alternative assets: Expected returns on bonds are an important factor for investors, but they do not solely determine the demand for an asset. Other factors such as risk and liquidity also play a role in influencing demand.