Question: 7 . Suppose there is a decrease in the price at which a bondholder sells her bond. In this case, the holding period return will:

7 . Suppose there is a decrease in the price at which a bondholder sells her bond. In this case, the holding period return will:

Multiple Choice

  • increase, since yields and prices are inversely related.
  • decrease, since this lowers the capital gain.
  • be negative.
  • equal the coupon rate.

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