Value of a fixed coupon interest rate bond


Question 1: As bond market interest rates increase, the value (i.e., price) of a fixed coupon interest rate bond (i.e., a typical corporate bond)

a. does not change

b. increases

c. decreases

d. insufficient information to answer this question

e. None of the above or insufficient information

Question 2: In an efficient capital market

a. studying past prices will help you earn above average returns on stock investments

b. all security investments are positive NPV investments.

c. securities are relatively fairly priced based on the information available to all investors

d. above normal returns can not be earned

e. None of the above or insufficient information

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Finance Basics: Value of a fixed coupon interest rate bond
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