Suppose the Market Interest Rate Falls from 3% to 2

question 14

Multiple Choice

Suppose the market interest rate falls from 3% to 2%.This will lead to ________ in bond prices and ________ in bond yields.

• A)a fall; a fall
• B)a fall; a rise
• C)a rise; a fall
• D)a rise; a rise
• E)no change; no change

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Definitions:

Reaction

The process by which one or more substances are transformed into different substances with distinct physical and chemical properties.

Organic Product(s)

Chemical compounds consisting of carbon that are produced as the outcomes of organic reactions.

Major

Often refers to the main or predominant component, phase, or aspect in a mixture, compound, or scenario.

Reaction

A reaction is a process in which one or more substances, the reactants, are converted to one or more different substances, the products.