The market prices of bonds fluctuate inversely with market interest rates.

Name: The market prices of bonds fluctuate inversely with market interest rates.
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Question

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When market interest rates increase, the prices of bonds decrease and vice versa. This is because investors demand a higher yield to compensate for the higher interest rates, which reduces the value of existing bonds. Therefore, the prices of bonds and interest rates have an inverse relationship.

The Market Prices of Bonds Fluctuate Inversely with Market Interest