🎴 Flashcard Mode
Interest Rates and Bond Markets
Card1 / 15
Mastered0
Review0
QuestionClick to flip
What is the relationship between interest rates and bond prices?
AnswerClick to flip back
A
Bond prices and interest rates move in opposite directions.
💡 Explanation:
When interest rates rise, bond prices fall, and vice versa. This is because bonds are fixed-income securities, and the value of a bond's future cash flows decreases when interest rates rise.