When Is It Best to Sell Bonds

question 122

Multiple Choice

When is it best to sell bonds?

• A) When interest rates are expected to rise,because this means bond prices will rise.
• B) When interest rates are expected to fall,because this means bond prices will rise.
• C) When interest rates are expected to rise,because this means bond prices will fall.
• D) When interest rates are expected to fall,because this means bond prices will fall.

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Definitions:

Profitable Level

A point at which revenues exceed costs, resulting in financial gain for businesses or economic activities.

Market Price

The current price at which an asset or service can be bought or sold, determined by the supply and demand dynamics in the open market.

Shut Down

A short-run decision by a firm to cease production when market conditions make continued operation unprofitable.

Market Price

The existing trade value at which an asset or service can be acquired or disposed of.