Question: The risk that interest rates will increase, and that increase will lead to a decline in the prices of outstanding bonds, is called interest rate

The risk that interest rates will increase, and that increase will lead to a decline in the prices of outstanding bonds, is called interest rate risk, or price risk.

True False

If investors expect the rate of inflation to increase sharply in the future, then we should see an upward-sloping yield curve.

True False

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