Interest Rates Declined in 2007

question 96

Multiple Choice

Interest rates declined in 2007.What happened to bond prices during this time?

• A)They were unchanged.
• B)They increased.
• C)They decreased.
• D)Not enough data to answer.

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Definitions:

Exchange Rate

The price of one currency in terms of another currency for conversion.

Currency

A system of money in general use in a particular country or region, serving as a medium of exchange, unit of account, and store of value.

Arbitrageur

Someone who takes advantage of tiny differences in the exchange rate across markets by simultaneously purchasing a currency in one market and selling it in another market.

Foreign Exchange

Trading one currency for another or transforming one currency into a different currency.