If Interest Rates Are Expected to Rise, the Bond Prices

question 59

Multiple Choice

If interest rates are expected to rise, the bond prices will:

• A)Not change until interest rates actually change
• B)Fall, due to the demand for bonds decreasing
• C)Rise, as people seek capital gains
• D)Move in the same direction as the expected change in interest rates

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Definitions:

Defined Benefit Program

A retirement plan where employee benefits are calculated based on a formula considering factors like salary history and duration of employment.

Income Level

The amount of monetary compensation received by an individual or household from various sources, often used as an indicator of economic status or standard of living.

Company's Profit

The financial gain made by a business after subtracting all expenses, taxes, and costs from total revenue.

Defined Benefit Plan

A type of pension plan where the benefits that the employee will receive upon retirement are predefined, usually based on factors like salary and years of service.