n NISM Certifications
X NISM Series X
Medium

When the market risk of a debt instrument increases, the bond’s price typically falls, which results in an increase in yield. This inverse relationship is fundamental in debt markets.

Practice question from NISM Series XIX A- Alternative Investments Funds (AIF) Distributors Mock Test 1 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. Price falls, yield increases

    Correct answer

  2. B

    Yield falls, price increases

  3. C

    Price determined by coupon rate

  4. D

    Market discounts the yield

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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