Holding all other variables constant, as market interest rates increase, bond prices ____.

Name: Holding all other variables constant, as market interest rates increase, bond prices ____.
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Question

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When market interest rates increase, the yield on newly issued bonds also increases to match the higher rates. This makes previously issued bonds with lower yields less attractive to investors, causing their prices to decrease. Conversely, when market interest rates decrease, bond prices tend to increase.

Holding All Other Variables Constant, as Market Interest Rates Increase