contestada

Prices of existing bonds move _________ as market interest rates move _________.
a) down, down
b) up, down
c) Bond prices don't move as market interest rates move.

Respuesta :

tutordamola

Answer:

The answer is B.

Explanation:

Bonds prices and market interest rates are negatively correlated i.e if the market interest rate(yield-to-maturity) of a bond goes up, the price of the bond goes down and if the yield-to-maturity(interest rate) rate goes down, the price of the bond goes up.

Usually, bonds with high interest rate are riskier than bonds with low interest rate.

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