Question

If interest rate are expected to rise, you would expect

A. bond prices to fall more than stock prices B. bond prices to rise more than stock prices

C. stock prices to fall more than band prices

D. stock prices to rise and bond prices to fall



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Answer 1

Explanation:

if market interest rates are expected to rise, you would expect___________.

A. bond prices to fall more than stock prices

B. bond prices to rise more than stock prices

C. stock prices to fall more than bond prices

D. stock prices to rise and bond prices to fall.

Answer: Option A

explanation :

If market interest rates rise, then the price of the bond with the 2% coupon rate will fall more than that of the bond with the 4% coupon rate. purchase bonds in a low-interest rate environment. A bond's maturity is the specific date in the future at which the face value of the bond will be repaid to the investor.

I hope this may help you