When the Bank of Canada's Actions Cause Interest Rates on Newly-Issued

question 92

Multiple Choice

When the Bank of Canada's actions cause interest rates on newly-issued bonds to increase from 5% to 6%,the prices of existing bonds

• A) increase.
• B) decrease.
• C) remain unchanged.
• D) increase only if the coupon rate is less than 6%.
• E) increase only if the coupon rate is greater than 6%.

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