Imagine a period of time in the future when general prices in the economy begin to move up rapidly. The increase in prices results in inflation, which in turn causes interest rates to rise. When this happens, bond investors can expect: The coupon rate of existing bonds to readjust upward. The par value of existing bonds to increase. The value of their bonds to decrease. The value of their bonds to increase.

Imagine a period of time in the future when general prices in the economy begin to move up rapidly. The increase in prices results in inflation, which in turn causes interest rates to rise. When this happens, bond investors can expect: The coupon rate of existing bonds to readjust upward. The par value of existing bonds to increase. The value of their bonds to decrease. The value of their bonds to increase