A Month Ago, You Bought a One-Year Bond with a Value

Multiple Choice

A month ago, you bought a one-year bond with a value of $100 that pays a fixed interest rate of 5 percent per year. The interest rate of the economy was also 5 percent. Today you read in the newspaper that the interest rate in the economy increased to 6 percent. You are holding a bond that is:

A) highly desirable to other investors.
B) less desirable to other investors.
C) not desirable at all.
D) desirable to you.