The Statement "Bond Prices Vary Inversely with Changes in the Market

question 9

Multiple Choice

The statement "Bond prices vary inversely with changes in the market rate of interest" means that if the

• A)market rate of interest increases, the contractual interest rate will decrease.
• B)contractual interest rate increases, then bond prices will go down.
• C)market rate of interest decreases, then bond prices will go up.
• D)contractual interest rate increases, the market rate of interest will decrease.

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