What is TRUE about the inverse relationship between price and yield: I. when interest rates rise; bond prices fall II. interest rates have no effect on the price of a zero-coupon bond III. when yields go up; prices go down IV. the yield on a 30-year bond goes up when interest rates go up
What is TRUE about the inverse relationship between price and yield: I. when interest rates rise; bond prices fall II. interest rates have no effect on the price of a zero-coupon bond III. when yields go up; prices go down IV. the yield on a 30-year bond goes up when interest rates go up
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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What is TRUE about the inverse relationship between price and yield:
I. when interest rates rise;
II. interest rates have no effect on the price of a zero-coupon bond
III. when yields go up; prices go down
IV. the yield on a 30-year bond goes up when interest rates go up
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