Answer:
B
Step-by-step explanation:
Inflation is a persistent rise in general price level.
When inflation is expected, Investors ask for an increase in nominal interest rate in order to maintain the value of investments.
When a security becomes more risky, the chances of default of the security increases, so investors ask for an higher total return in order to compensate for the increased risk of default.
Risk premium increases with the increase in risk of a security
Investors are less willing to hold the bond because there is the risk that the security won't be able to make the contractual payments