What Happens to the Price of Bonds If Interest Rates

question 31

Multiple Choice

What happens to the price of bonds if interest rates go up?

• A) The price of bonds goes up.
• B) The price of bonds stays the same.
• C) The price of bonds goes down.
• D) The direction of price change depends on the shape of the yield curve.

---

Definitions:

Electrical Motor

A device that converts electrical energy into mechanical energy, typically used to power machines or vehicles.

Overhead

The ongoing expenses of operating a business that are not directly associated with the production of goods or services.

Fixed Manufacturing Overhead

Costs that remain constant regardless of the level of production, related specifically to the manufacturing process, such as rent, utilities, and salaries of permanent staff.

Machine-Hours

A measure of machine usage, representing the total hours a machine operates during a specific period.