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Bonds 101: Bond Market Interest Rates

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1.
When interest rates fall, bond prices _______.
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Rise. Because rates on existing bonds may be higher than bonds issued with the lowered rates, owners of existing bonds can sell theirs for a profit.
2.
Changing interest rates affect bonds with different maturities to the same degree.
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False. Changing interest rates affect bonds with varying maturities differently.
3.
A continuous rise in bond prices indicates a bullish market.
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True. It is accompanied by falling interest rates.
4.
The higher a bond's duration, the lower its price risk.
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False. The higher a bond's duration, the higher its price risk.
5.
When bond prices fall, bond yields _______.
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Rise. When bond prices fall, bond yields rise.
DONE