Question: If the payments on a bond are fixed, an increase in the market interest rate will always increase its market value. Increase its market value
If the payments on a bond are fixed, an increase in the market interest rate will
always increase its market value.
Increase its market value if its earlyintheterm payments are large relative to its later payments.
always decrease its market value.
increase its market value if its laterintheterm payments are small relative to its earlier payments.
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