When the interest rate on newly issued bonds increases, the price of existing bonds: Group of answer choices. increases increases only if the coupon rate is below the new rate decreases may either increase or decrease
When the interest rate on newly issued bonds increases, the price of existing bonds: Group of answer choices. increases increases only if the coupon rate is below the new rate decreases may either increase or decrease
Chapter4: Time Value Of Money
Section4.6: Perpetuities
Problem 2ST
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Question
When the interest rate on newly issued bonds increases, the price of existing bonds:
Group of answer choices.
increases
increases only if the coupon rate is below the new rate
decreases
may either increase or decrease
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