SIE (Securities Industry Essentials) Practice Exam 2026 - Free SIE Practice Questions and Study Guide

Question: 1 / 400

When market interest rates go up, a bond's:

Price goes up

Yield to maturity goes up

Current Yield (CY) goes up

When market interest rates go up, a bond's Current Yield (CY) goes up. This is because CY is calculated by dividing the annual interest payment by the bond's current market price. As market interest rates increase, the bond's current market price will decrease, making the CY go up. Options A, B, and D are incorrect because they do not accurately describe the relationship between market interest rates and a bond's price, yield to maturity, or call price. When market interest rates go up, the price of a bond actually goes down, the yield to maturity also goes down, and the call price remains the same.

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Call price goes up

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