The bond market is considered bearish when
A) market interest rates are low or falling.
B) market interest rates are high or rising.
C) the risk-free rate of return exceeds the required rate of return.
D) more bonds are called than issued over a given period of time.

Question

Quizplus · Accepted Answer

When market interest rates are high or rising, bond prices typically fall, leading to a bearish bond market. This is because the fixed payments from existing bonds become less attractive compared to new bonds issued at higher rates.

The Bond Market Is Considered Bearish When