Question

WILL GIVE BRAINIEST FOR CORRECT ANSWER!!!!!!!!!!!!

Answer 1

Your answer would be (B). Decrease in value.

Answer 2

Answer: B. Decrease in value.

Explanation:

A fixed-rate bond is a one that returns the same amount of interest for its whole duration. An investor who needs to earn an assured interest rate for a defined time could buy a fixed-rate corporate bond, as well as a treasury bond or municipal bond.

The advantage of holding a fixed-rate bond is that investors know without any doubts the amount of interest they will collect and for how long.

However, the main risk of having fixed-rate bonds is interest rate risk. If that bond interest rate rises, the investor’s existing bonds become less valuable.