The market value of a fixed-rate liability will decrease as interest rates rise, just as the market value of a fixed-rate asset will decrease as interest rates rise.

Name: The market value of a fixed-rate liability will decrease as interest rates rise, just as the market value of a fixed-rate asset will decrease as interest rates rise.
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Question

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As interest rates rise, the present value of future cash flows decreases. This means that both fixed-rate assets and fixed-rate liabilities will decrease in value.

The Market Value of a Fixed-Rate Liability Will Decrease as Interest