Interest rates and bond pricesA. move in the same direction.
B. move in opposite directions.
C. sometimes move in the same direction, sometimes in opposite directions.
D. have no relationship with each other (i.e., they are independent).
B. move in opposite... View the full answer
- When new bonds are issued, they typically carry coupon rates at or close to the prevailing market interest rate. Interest rates and bond prices have an inverse relationship; so when one goes up, the other goes down.
- Jul 19, 2016 at 5:49pm