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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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