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

Question 60

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 decreased to 3 percent. You are holding a bond that is:


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

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