If Interest Rates Consistently Decline Over a Specific Period, the Market

question 35

Multiple Choice

If interest rates consistently decline over a specific period, the market price of a bond you own would likely ____ over this period. (Assume no major change in the bond's default risk.)

• A) consistently increase
• B) consistently decrease
• C) remain unchanged
• D) change in a direction that cannot be determined with the above information

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Definitions:

Disaster Risk

The potential loss or damage that could occur to a system, society, or community in a specific period due to disasters.

Suppliers

Businesses or individuals that provide goods or services to another entity under terms specified in a contract or agreement.

Great East Japan Earthquake

A magnitude 9.0 undersea earthquake off the Pacific coast of Japan, occurred on March 11, 2011, causing widespread damage and triggering a tsunami.