the inverse relationship between the rate of interest and bond prices due to:-
(a) hight opportunity cost of holding cash
(b) constant Money supply
(c) inflation
(d) all the above
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Answer:
high opportunity cost of holding cash
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Answer:
The answer is a ) hight opportunity cost of holding cash
Explanation:
Bonds have an inverse relationship to interest rates. When the cost of borrowing money rises (when interest rates rise), bond prices usually fall, and vice-versa.
when new bonds are issued, they generally deliver coupon costs at or close to the winning marketplace interest price. interest quotes and bond expenses have an inverse dating; so when one goes up, the other is going down
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