Question

A decrease in the liquidity of corporate bonds will​ ________ the yield of corporate bonds and​ ________ the yield of Treasury​ bonds, everything else held constant

Answer 1

A decrease in the liquidity of corporate bonds, other things being equal, shifts the demand curve for corporate bonds to the Left and the demand curve for Treasury bonds shifts to the Right.

Explanation:

A decrease in the liquidity of corporate bonds, other things being equal, shifts the demand curve for corporate bonds to the Left and the demand curve for Treasury bonds shifts to the Right.