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Bonds 101: Bond Market Interest Rates

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1.
When bond prices fall, bond yields _______.
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Rise. When bond prices fall, bond yields rise.
2.
When an investor has to sell his or her bond at a discount, it usually means _______.
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Interest rates have risen. The investor must do this to attract buyers, who can get higher rates elsewhere.
3.
A continuous rise in bond prices indicates a bullish market.
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True. It is accompanied by falling interest rates.
4.
When interest rates fall, assuming an equal amount for all bond maturities, bonds with short maturities will have _______.
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Smaller premiums than bonds with longer maturities. Short maturities mean small discounts.
5.
If interest rates rise 2 percent and a bond's duration is 10 years, you can expect _______.
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The bond's price to fall 20 percent. If interest rates rise 2 percent and a bond's duration is 10 years, you can expect the bond's price to fall 20 percent.