Bond Interest Rates Change as the Market Rate of Interest

question 163

True/False

Bond interest rates change as the market rate of interest changes.

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Definitions:

Savings Account

A bank account where money is deposited for safekeeping, which earns interest over time.

Simple Interest

Interest calculated on the principal portion of a loan or deposit without compounding.

Commercial Paper

An unsecured, short-term debt instrument issued by corporations, typically used for the financing of payroll, accounts payable, and inventories, and meeting other short-term liabilities.

Simple Interest

Interest computed solely on the initial sum or on the outstanding part of that initial sum.