Which of the following characteristics of most debt instruments cause bond prices to vary inversely with changes in financial market interest rates?
A)coupon rates
B)maturity dates
C)par redemption values
D)all of the above

Question

Quizplus · Accepted Answer

Bond prices vary inversely with interest rates due to the fixed nature of coupon rates, maturity dates, and par redemption values. When interest rates rise, existing bonds with lower coupon rates become less attractive, causing their prices to fall. Conversely, when interest rates fall, existing bonds with higher coupon rates become more attractive, causing their prices to rise.

Which of the Following Characteristics of Most Debt Instruments Cause