[related to solved problem #4] the demand for plumsplums is highest during summer and lowest during winter. yet plumplum pric
es are normally lower in summer than in winter. what must be happening to the supply of plumsplums, from winter to summer, for the equilibrium price to fall? loading... click on the icon to experiment with inward and outward shifts in supply and demand. note the change in equilibrium price and quantity. a. the supply increases, but less than the demand increases.
b. the supply for plumsplums decreases.
c. the supply does not change.
d. the supply increases more than the demand increases.
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The present value of a bond will change when interest rate changes. The present value is the price at which you will buy the bond. Interest rate is also known as the yield to maturity (YTM). This interest rate has an inverse relationship with the price; meaning, if YTM increases, the price of the bond will decrease and vice versa.
Expected cashflows are the recurring coupon payments which are usually fixed amount in the case of a coupon paying bond. For this reason, they do not change with changes in interest rate.
The maturity value also known as the Face value or Par value is fixed and does not change with changes in interest rate.