IAS Gyan

Daily News Analysis


26th May, 2023 Economy

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  • The yield on the benchmark 10-year government security (G-sec) has fallen to 6.9 % from 7.4 % in early March, 2023.

ALL ABOUT BOND YIELD: https://www.iasgyan.in/blogs/bond-yield#:~:text=Example%20from%20Market%20Perspective&text=Now%20the%20price%20of%20the,by%20Rs%201%2C030%20%3D%204.85%25.


Q. Consider the following statements:

1. Falling interest rates make bond prices rise and bond yields fall.

2. Economic conditions that might decrease bond yields include high rates of unemployment and slow Economic Growth or Recession.

Which of the above statements is/are incorrect?

(a) Only 1

(b) Only 2

(c) Both 1 and 2

(d) Neither 1 nor 2

Correct Answer: (d) Neither 1 nor 2