Multiple Choice
Suppose that one year ago you purchased a $1,000 bond with an interest payment of $40 per year and,at the time,the interest rate was 4 percent.One year later the interest rate on bonds has increased to 5 percent,and you still hold the bond you purchased a year ago.If you were to sell your bond now,the price that you could sell it for would be
A) higher than it was when you bought it.
B) lower than it was when you bought it.
C) the same as it was when you bought it,that is,$1,000.
D) lower or higher than it was when you bought it,but we cannot determine which.
Correct Answer:
Verified
Correct Answer:
Verified
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