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

question 10

Multiple Choice

As 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:

Common Law

A legal system based on custom, court rulings, and past incidents rather than written laws.

Case Law

Law established by previous court decisions and based on precedent rather than statutes or regulations; integral to common law legal systems.

Employment-at-will

A legal doctrine that means an employer has the right to terminate an employee at any time for any reason, except an illegal one, and the employee is likewise free to quit, strike, or otherwise cease work.

Terminate

To bring something to an end; in employment, it refers to the act of ending the employment relationship between an employer and employee.