Why is the relationship between price and yield negative? a. Because investors reward higher cash-flows with a
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Question:
Why is the relationship between price and yield negative?
a. Because investors reward higher cash-flows with a lower price.
b. Because governments regulation prohibits a positive relationship.
c. Because an increase in the yield discounts cash flows at a higher rate and so their net present value decreases.
d. Because cash flows are variable over a bond’s life.
Related Book For
Statistics for Business Decision Making and Analysis
ISBN: 978-0321890269
2nd edition
Authors: Robert Stine, Dean Foster
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