Which of the following will cause the value of a bond to increase,other things held the same?

Question

Quizplus · Accepted Answer

When interest rates decrease, the value of existing bonds increases. This is because the bond's fixed interest payments become more attractive to investors in comparison to new bonds with lower interest rates. The opposite is also true - when interest rates increase, the value of existing bonds decreases. Therefore, option C is the correct answer.

Which of the Following Will Cause the Value of a Bond