Multiple Choice
Suppose you purchase a $1,000 bond that bears an interest rate of 10 percent.What will happen if the interest rate goes to 20 percent?
A) The market price of the bond will increase to $2,000.
B) The market price of the bond will drop to $500.
C) The return on the bond will double.
D) The return on the bond will halve.
Correct Answer:
Verified
Correct Answer:
Verified
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