If the market rate of interest on bonds that are recorded increases,the market value of the liability increases.

Question

Quizplus · Accepted Answer

If the market rate of interest on bonds that are recorded increases, the market value of the liability decreases. This is because when interest rates increase, new bonds with higher interest rates become available, making existing bonds with lower interest rates less desirable to investors. This leads to a decrease in demand for the bonds, causing their market value to decrease.

If the Market Rate of Interest on Bonds That Are