Question

James has purchased a 10-year bond that pays a $50 coupon. If interest rates go up, __________. the bond price will go up the bond price will go down the bond coupon will go up the bond coupon will go down

Answer 1

If James has purchased a 10-year bond that pays a $50 coupon, and if interest rates go up, the bond price will rise, because the interest he is owed by the government will increase.