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2 answers:

levacccp [35]3 years ago

6 0

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

Natasha_Volkova [10]3 years ago

5 0

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.

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