When the price of a financial asset ________ its interest rate will ________.
A)rises; rise
B)falls; fall
C)falls; rise
D)rises; remain the same

Question

Quizplus · Accepted Answer

When the price of a financial asset falls, its interest rate (or yield) will rise. This is because the interest payment on the asset remains constant, so if the price you pay for the asset decreases, the yield (interest payment relative to the purchase price) increases.

When the Price of a Financial Asset ________ Its Interest