Which of the following describes the relationship between changes in market interest rates and the market value of bonds?

Question

Quizplus · Accepted Answer

The relationship between interest rates and bond prices is inversely proportional. When market interest rates increase, existing bonds with lower interest rates become less attractive, leading to a decrease in their market value (C). Conversely, when market interest rates decrease, existing bonds with higher interest rates become more attractive, leading to an increase in their market value (D).

Which of the Following Describes the Relationship Between Changes in Market