If interest rates decline, which would you rather beholding, long-term bonds or short-term bonds? Why?Which type of bond has the greater interest-rate risk?

When interest rates decrease, how might businesses andconsumers change their economic behavior?

A bond has a Macaulay duration of 10.00 and is priced to yield 8.0​%. If interest rates go up so that the yield goes to 8.5%​, what will be the percentage change in the price of the​ bond? Now, if the yield on this bond goes down to 7.5​%, what will be the​ bond's percentage change in​ price? Comment on your findings. If interest rates go up to 8.5​%, the percentage change in the price of the bond is nothing​%. ​(Round to two decimal​ places.) If interest rates go down to 7.5​%, the percentage change in the price of the bond is nothing​%. ​(Round to two decimal​ places.) Comment on your findings.  ​(Select the best answer​ below.)     A. As interest rates​ decrease, the price of the bond decreases. As interest rates​ increase, the price of the bond increases.   B. As interest rates increase or​ decrease, the price of the bond will always increase.   C. As interest rates increase or​ decrease, the price of the bond remains the same.   D. As interest rates​…

Consider a fixed-payment security that pays $500 at the end of every year for ten years. If the rate of discount is 7 percent, find the present value of the bond? Show your work..