What Is the Inverse Relationship Between Bond Prices and Interest

question 50

Multiple Choice

What is the inverse relationship between bond prices and interest rates?

• A)When interest rates go up,bond prices fall; when interest rates go down,bond prices increase.
• B)When interest rates go down,bond prices fall; when interest rates go up,bond prices increase.
• C)When interest rates go up,bond prices increase; when interest rates go down,bond prices increase.
• D)There is no inverse relationship between bond prices and interest rates.

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Definitions:

Income Statement

A financial report detailing a company's revenues, expenses, and profits or losses over a specific period, demonstrating financial performance.

General Journal

A primary accounting record where financial transactions are entered in chronological order, before posting to accounts in the general ledger.

Sales Discounts

A reduction from the listed price of goods or services that is offered by a seller to a buyer, typically to encourage prompt payment.

Gross Profit

Gross profit is a company's total revenue minus the cost of goods sold, representing the profit from its core business operations.