Question: An unexpected decrease in market interest rates will cause: a. no change in bond prices as the change was unexpected. b. an increase in coupon

An unexpected decrease in market interest rates will cause:

a. no change in bond prices as the change was unexpected.

b. an increase in coupon rates on new bonds but no change in bond prices.

c. bond prices to decrease and current yields to increase.

d. bond prices to increase and the current yield to decrease.

e. both bond prices and yields to maturity to increase.

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