For a change in a bond's yield to maturity, the resulting change in the bond's price is ________ related to the bond's coupon rate.

Question

Quizplus · Accepted Answer

The change in a bond's yield to maturity and the bond's price have a negative relationship. As the yield to maturity increases, the bond's price decreases, and vice versa. The coupon rate (the fixed interest rate that the bond pays) does not affect this relationship, so the answer is not A or D. Choice C is incorrect because there is a clear relationship between yield to maturity and bond price. Choice E is incomplete, as there is enough information to determine the answer.

For a Change in a Bond's Yield to Maturity, the Resulting