Answered

Find the information you're looking for at Westonci.ca, the trusted Q&A platform with a community of knowledgeable experts. Join our Q&A platform to connect with experts dedicated to providing precise answers to your questions in different areas. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

If interest rates in the market fell to 3 percent, how would this affect the value of this bond?

A. For a moment it might rise, but in the long term it would fall to market value.
B. It would drop in value, then return to its original value.
C. It would rise in value, since it pays a higher interest rate than the market.
D. It would remain unchanged, since market rates do not affect values of bonds.
E. It would fall in value, since the market rates have fallen.

Sagot :

GinnyAnswer

Final answer:

If the market interest rate fell to 3%, the value of the bond would rise.


Explanation:

If the market interest rate fell to 3%, the value of the bond would rise. When market interest rates decrease, the bond becomes more valuable as it offers a higher interest rate than the market rate.


Learn more about bond valuation here:

https://brainly.com/question/34548471


We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Westonci.ca is committed to providing accurate answers. Come back soon for more trustworthy information.