Which of the following statements characterizes the typical relationship between the market value of a...

Step by Step Explanation:

Inverse Relationship: Bond prices and interest rates have an inverse relationship. When interest rates fall, existing bonds with higher coupon rates become more valuable, leading to an increase in market value.

Incorrect Options:

A: Market value decreases as interest rates increase.

C: Interest rates and bond values move inversely, not in the same direction.

D: Interest rates are not constant; they fluctuate over time.

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