Choose the statement that is incorrect about Treasury bonds.
A)If the price of a Treasury bond rises, other things remaining the same, the interest rate falls because the interest payment is a smaller percentage of the Treasury bond price.
B)The price of a Treasury bond and the interest rate on a Treasury bond are determined simultaneously.
C)If the demand for Treasury bonds increases, the interest rate on the Treasury bond rises.
D)The interest rate is a percentage of the price of the Treasury bond.
E)When the interest rate on a Treasury bond rises, the supply of Treasury bonds increases.

Question

Quizplus · Accepted Answer

If the demand for Treasury bonds increases, the interest rate on the Treasury bond falls (not rises). The other statements are correct.

Choose the Statement That Is Incorrect About Treasury Bonds