A bond's price and yield:
A) move in opposite directions.
B) move in the same direction.
C) must sum up to 1,000.
D) are usually equal in value.

Name: A bond's price and yield: A) move in opposite directions. B) move in the same direction. C) must sum up to 1,000. D) are usually equal in value.
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Question

Quizplus · Accepted Answer

When bond prices increase, yields decrease, and vice versa. This inverse relationship is due to the fixed nature of bond coupon payments relative to changing market interest rates.

A Bond's Price and Yield