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    Interest rate and bond prices

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    As interest rates increase, bond prices generally:
    a. increase
    b. do not change, because they are fixed by contract
    c. do not change, because the prices are offsetting the rate increases
    d. decrease.

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    Solution Preview

    As per mysmp, "When interest rates move higher, the bond yield that a pre-existing bond has becomes less ...

    Solution Summary

    Response explains the relationship between Interest rate and bond prices.