How Are Treasury Bond Prices Affected When the Interest Rate

question 197

Multiple Choice

How are Treasury bond prices affected when the interest rate falls?

• A)The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must decrease.
• B)The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must increase.
• C)The purchaser of the bond needs to spend more money to obtain a given number of dollars of interest per year, so the price of the bond must decrease.
• D)The purchaser of the bond needs to spend less money to obtain a given number of dollars of interest per year, so the price of the bond must increase.

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Definitions:

Semipermeable

A type of membrane that allows certain substances to pass through it while blocking others, often used in biological and chemical contexts.

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The semipermeable membranes that surround cells, controlling the movement of substances in and out of the cell.

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Injury to the brain that impairs its functions, which can be caused by trauma, stroke, disease, or other conditions, leading to temporary or permanent cognitive, physical, or emotional impairment.