You hold a long-term bond yielding 10%. If interest rates fall before you sell the bond, you will sell at a higher price than if interest rates had been constant.
Since the interest rates on a bond are fixed, a decrease in yields available on similar bonds means that this bond is more desirable, and would therefore increase its price.

Question

Quizplus · Accepted Answer

When interest rates fall, the bond you hold becomes more desirable due to its higher yield, leading to an increase in its price. As a result, you will be able to sell the bond at a higher price than if interest rates had remained constant.

You Hold a Long-Term Bond Yielding 10