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When interest rates rise, what happens to the NAVPU of a bond fund invested in long- term bonds? A. The NAVPU decreases. The underlying bonds
When interest rates rise, what happens to the NAVPU of a bond fund invested in long- term bonds?
A. | The NAVPU decreases. The underlying bonds decline in value. | |
B. | The NAVPU increases. Investors are attracted to the higher interest rates. | |
C. | The NAVPU decreases. Investors sell the fund and buy higher yield T-bills. | |
D. | The NAVPU remains unchanged. The fund is locked into long-term bonds. |
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