A pricing theorem for the bond market states that if a bond's market price increases, then its yield must

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The pricing theorem for the bond market states that when a bond's market price increases, its yield must decrease. This is because the interest payment on the bond remains fixed, and as the market price of the bond increases, it generates less income for the bondholder, which drives the yield down. Similarly, when a bond's price decreases, its yield must increase to keep the return proportionate to the bond's current price.

A Pricing Theorem for the Bond Market States That If