Question

Question 17

1. When interest rates move up or down, bond prices move:

A		in the opposite direction.
B		in the same direction.
C		in the opposite direction and further the longer is the term until maturity.
D		in the same direction but less the longer is the term until maturity.

Answer 1

Please find below the solution.. let me know if you need any clarification..

correct answer is option : C in the opposite direction and further the longer is the term until maturity.

Note: If i am allowed to give more than 1 answer than both option A and C are correct. bond price move in the opposite direction compared to interest rate movement.