Which of the following statements about the relationship between interest rates and bond prices are true? (Select all that apply)

Interest rates and bond prices have an inverse relationship, meaning when interest rates go up, bond prices go down, and vice versa. This happens because when new bonds are issued at higher interest rates, existing bonds with lower rates become less attractive to investors. For example, if you have a bond that pays 3% interest and new bonds are offering 5%, people will want the new bonds instead, making your bond's price drop. Understanding this relationship is important for investors because it helps them make better decisions about buying or selling bonds based on interest rate changes. Therefore, whenever interest rates rise, bond prices tend to fall, and when interest rates decrease, bond prices tend to rise.