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your grandmother gives you a $100 savings bond that will mature in fifteen years. the bank tells you that they will buy it from you today at a price of $24. if interest rates rise in the near future, the value of your bond

Respuesta :

Your bond's value will decrease to less than $24 if interest rates rise in the near future.

When interest rates go up, what happens to bonds?

The price of bonds is inversely correlated with interest rates. This indicates that bond prices decrease when interest rates rise, and rise when interest rates fall.

When interest rates rise, why does the value of your bond decrease?

The majority of bonds have a fixed interest rate that rises in demand and drives up the bond's price as interest rates fall. On the other hand, a bond's price will fall as a result of investors losing preference for the bond's lower fixed interest rate as interest rates rise.

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