Rising interest rates will cause the market value of
A)call options on bonds to increase.
B)put options on bonds to decrease.
C)call options on bonds to decrease.
D)bond futures to increase.
E)Answers A and B only.

Question

Quizplus · Accepted Answer

Rising interest rates generally lead to a decrease in bond prices, which in turn causes the market value of call options on bonds to decrease, as the underlying asset (the bond) becomes less valuable.

Rising Interest Rates Will Cause the Market Value of