● Statement 1 is correct: The twin factors that affect a bond's price are inflation and changing interest rates. A rise in either interest rates or the inflation rate will tend to cause bond prices to drop. Inflation and interest rates behave similarly to bond yields, moving in the opposite direction from bond prices. In short, inflation makes interest rates go up. This in turn makes bond values go down. Exception- A Bond with a fixed coupon rate will hold the same interest rate, no matter what happens in the market. ● Statement 2 is correct: Unlike stocks, the principal value of a bond is returned to the investor in full at maturity. This can make bonds attractive to risk-averse investors who are concerned about losing their capital. Although bonds are often viewed as a capital preservation tool, they also offer opportunities for capital appreciation.
Which of the following was the final invasion by Mahmud of Ghazni outside Punjab?
Atal Bhujal Yojana (ATAL JAL) is being implemented as a Central Sector Scheme under Which ministry
Which of the following dynasty is also known as the Mamluk Dynasty?
Who was the chief architect responsible for the construction of the Taj Mahal?
The earliest evidence of the availability of silver in India is found in-
Which Indus Valley civilization site located on the Tropic of Cancer did Radha visit?
Who is credited as the founder of the Satavahana dynasty?
Who is known as DESHBANDHU?
Which of the following factors made the kingdom of Avanti, the most serious competitor of Magadha?
1. Availability of Iron ore mines.
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Which was the first Grammar Book of Sanskrit?