If market interest rates fall,the selling price of existing bonds in the market will,ceteris paribus,

Question

Quizplus · Accepted Answer

When market interest rates fall, the demand for existing bonds increases, which in turn raises their prices. This is because investors are willing to pay more for the fixed return offered by the bond when the prevailing interest rates are lower. Therefore, in such a scenario, the selling price of existing bonds in the market will rise.

If Market Interest Rates Fall,the Selling Price of Existing Bonds