QuestionDecember 15, 2025

1. STOCK MARKET (Topics 6.5-6.7) Bond price vs. interest rates Treasury bonds Junk bonds Bull market Diversification

1. STOCK MARKET (Topics 6.5-6.7) Bond price vs. interest rates Treasury bonds Junk bonds Bull market Diversification
1. STOCK MARKET (Topics 6.5-6.7)
Bond price vs. interest rates
Treasury bonds
Junk bonds
Bull market
Diversification

Solution
4.7(215 votes)

Answer

1. Bond prices fall as interest rates rise. ### 2. Treasury bonds are safe, long-term U.S. government bonds. ### 3. Junk bonds are risky, high-yield corporate bonds. ### 4. A bull market features rising stock prices. ### 5. Diversification reduces risk by investing in different assets. Explanation 1. Bond price vs. interest rates Bond prices and interest rates move inversely; when rates rise, bond prices fall, and vice versa. 2. Treasury bonds Treasury bonds are long-term, low-risk government debt securities with fixed interest payments. 3. Junk bonds Junk bonds are high-yield, high-risk corporate bonds rated below investment grade. 4. Bull market A bull market is a period of rising stock prices and investor optimism. 5. Diversification Diversification means spreading investments across various assets to reduce risk.

Explanation

1. Bond price vs. interest rates<br /> Bond prices and interest rates move inversely; when rates rise, bond prices fall, and vice versa.<br /><br />2. Treasury bonds<br /> Treasury bonds are long-term, low-risk government debt securities with fixed interest payments.<br /><br />3. Junk bonds<br /> Junk bonds are high-yield, high-risk corporate bonds rated below investment grade.<br /><br />4. Bull market<br /> A bull market is a period of rising stock prices and investor optimism.<br /><br />5. Diversification<br /> Diversification means spreading investments across various assets to reduce risk.
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