A bond's price and prevailing interest rates generally have what relationship?

a.They move in the same direction

b.They move in opposite directions

c.They are unrelated

d.They are always equal

Explicación

Bond prices and interest rates move inversely: when rates rise, existing bond prices fall, and when rates fall, prices rise. This reflects the fixed coupon becoming relatively less or more attractive. Longer maturities amplify this sensitivity.

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Última revisión: 2026-06-08 · proceso editorial

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