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A Bond Issuer Agrees to Pay a Stated Nominal Amount

Question 18

Multiple Choice

A bond issuer agrees to pay a stated nominal amount each year.An increase in the nominal interest rate will cause


A) the price of the bond to fall.
B) the price of the bond to rise.
C) the nominal value of the bond's coupon to rise.
D) the nominal value of the bond's coupon to fall.

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