1) Fill in the blanks to complete the passage about the relationship between bond prices and bond interest rates

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1) Fill in the blanks to complete the passage about the relationship between bond prices and bond interest rates. Drag word(s) below to fill in the blank(s) in the passage. When the price on a $10,000 twenty-year bond rises, the interest rate –. This is because interest on a bond is – to the bond holder. When cost – and payoff –, profit goes down.

(remains the same, goes up, payment, goes down, cost)

2) Bond prices and yields are positively related.

True

False

3) have a residual claims on assets and income.

Common stockholders

Preferred stockholders

Secured bondholders

Unsecured bondholders