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Shen is concerned that a decline in interest rates might lead to annual income from his investments. If interest rates ______________, the value of earnings from his investments will _________________.
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36 votes
36 votes
Shen is concerned that a decline in interest rates might lead to annual income from his investments. If interest rates ______________, the value of earnings from his investments will _________________. If his goal is to save for retirement, which bonds poses the biggest risk?

User HPWD
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1 Answer

23 votes
23 votes

Answer:

Decline

Increase

Increase

Bond with low interest rate.

Step-by-step explanation:

A decline in interest rates might lead to a decline of annual income

and if interest rates increase the value of earnings from his investments will Increase

Given that his goal is to save for retirement and not to sell off, The bonds that poses the biggest risk is the bond with a low interest rate

User Kursat
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