Answer:
The minimum parcel size for corporate bonds is $1,000, which is Answer A. Bond prices are inversely related to interest rates, meaning if rates go up, bond prices go down and vice versa.
Step-by-step explanation:
The minimum parcel size for corporate bonds is typically $1,000. This is the smallest increment of bond value that can be purchased. Therefore, the correct answer to the given question is A) $1,000.
Concerning the relationship between interest rates and bond prices, if interest rates rise, the price of existing bonds tends to fall, since new bonds would be issued at higher rates making the older ones less attractive. Conversely, if interest rates fall, existing bonds with higher interest become more valuable, and their prices increase. Therefore, if interest rates have changed and you hold a bond with a fixed interest rate, the amount you would pay for the bond (if you were buying it in the market) could be more or less than its face value of $10,000, depending on whether interest rates have gone up or down.