As interest rates fall, the prices of bonds decline.

Name: As interest rates fall, the prices of bonds decline.
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Question

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When interest rates fall, the prices of bonds actually rise, as investors are willing to pay more for the same coupon payments. Conversely, when interest rates rise, the prices of bonds fall, as investors demand a higher yield to compensate for the higher interest rate environment.

As Interest Rates Fall, the Prices of Bonds Decline