If the inflation premium for a bond goes up, the sales price of the bond
A) is unaffected.
B) goes down.
C) goes up.
D) More information is needed for an answer.

Question

Quizplus · Accepted Answer

If the inflation premium for a bond goes up, it means that investors demand a higher return on the bond to compensate for the increased inflation risk. This leads to a decrease in the bond's price. Therefore, the sales price of the bond goes down.

If the Inflation Premium for a Bond Goes Up, the Sales