The value of an asset such as a bond will rise when

Question

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When interest rates fall, the value of an asset such as a bond will rise. This is because the bond's fixed interest rate becomes more attractive relative to current market interest rates, leading investors to bid up the price of the bond. Conversely, when interest rates rise, the value of existing bonds decreases because their fixed interest rate becomes less attractive compared to higher market interest rates.

The Value of an Asset Such as a Bond Will