Question

It is a fact that there is a(n) ________ relationship between interest rates and bond values in the secondary market. When interest rates ________, bond prices ________, and when interest rates ________, bond prices ________. Question 10 options: direct; drop; rise; rise; drop inverse; rise; rise; drop; drop direct; rise; rise; drop; drop direct; rise; drop; drop; rise inverse; rise; drop; drop; rise

Answer 1

Inverse; rise; drop; drop; rise

It is a fact that there is an inverse relationship between interest rates and bond values in the secondary market. When interest rates rise, bond prices drop, and when interest rates drop, bond prices rise.

What is the relationship between interest rate and bond values?

Bond prices and interest rates go hand in hand. Bond prices typically decline as borrowing costs increase (when interest rates rise), and vice versa.

Most bonds have a fixed interest rate that increases in attractiveness when interest rates decline, increasing demand and bond price.

In contrast, a bond's price will drop if interest rates increase because investors will no longer value the lower fixed interest rate it offers.

Learn more about relationship between interest rate and bond prices here:

brainly.com/question/24922696

#SPJ4