When Interest Rates Move Up or Down, Bond Prices Move

question 111

Multiple Choice

When interest rates move up or down, bond prices move:

• A)in the opposite direction.
• B)in the same direction.
• C)in the opposite direction and further the longer is the term until maturity.
• D)a and c

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Definitions:

Difference Threshold

The minimum difference in stimulation that a person can detect 50% of the time.

Just Noticeable Difference (Jnd)

The least alteration in a stimulus that is just noticeable by an organism.

Absolute Threshold

The minimum stimulus intensity required for detection by a sense organ, signifying the point at which a stimulus becomes perceptible to the senses.

Noticeable Threshold

A threshold is the level at which a stimulus becomes sufficiently strong to produce a discernible effect or reaction.