Your financial investments consist of U.S. government bonds maturing in twenty years and shares in a start-up internet company. If interest rates on newly-issued government bonds increase, then the price of your bonds will ________ and the price of the shares you own will ________.

Question

Quizplus · Accepted Answer

If the price of newly-issued bonds increases, then the price of current bonds will decrease. Similarly, the price of shares you own will also fall because those shares become less attractive when compared to newly-issued bonds.

Your Financial Investments Consist of U