When interest rate drop, bond prices do what?

answer
The correct answer is 2. When interest rates drop, the value of a bond goes up. This happens because the interest rate in the market declines making the future cash flow of the bond rise in value.
Part of the course

Try it out

00:00
00:00

Pick a plan that suits you the best!

Monthly Subscription

$12/month
(billed monthly)

Annual Subscription

$5/month 
(billed annually)

All our plans includes:

  • High quality audio lessons
  • Lesson summaries
  • Interactive questions
  • Learn & Earn
  • Flashcards
  • Lesson transcripts
  • Learning community