Changes in the value of a firm's stocks and bonds offer important information for a firm's managers. If the price is decreasing investors are and are providing information that indicates the firm's managers might want to the business.

Changes in the value of a firm's stocks and bonds offer important information for a firm's managers.If the price is decreasing investors are More pessimistic and are providing information that indicates the firm's managers might want to contract the business.

Explanation:

if the price of stock or a bond decreases it is likely to make all the investors more pessimistic about the performance of a concern.They might take it negatively considering that a concern wants to contract it's business.

Investors emotion counts a lot.If they think that a particular stock is worthless than it's value will surely drop but on the other hand if they think that a particular stock is very important than it's value will increase.

If investors become pessimistic about a concern's performance than it's stocks are sure to fall.When price falls then it leads to contraction of business.Investors feels positive only if price of a particular bond or a stock is increasing .