Why is the relationship between price and yield negative? a. Because investors reward higher cash-flows with a

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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.

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Statistics for Business Decision Making and Analysis

ISBN: 978-0321890269

2nd edition

Authors: Robert Stine, Dean Foster

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Posted Date: Jan 02, 2021 03:50 PM

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Why is the relationship between price and yield negative? a. Because investors reward higher cash-flows with a

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Option D is correct Explanation Bond price and bond yield are inversely related As the ... View the full answer

Statistics for Business Decision Making and Analysis

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