单选题
What will happen to interest rate risk for an option-free bond if market yields decrease? A. Interest rate risk will increase. B. Interest rate risk is indeterminate because this type of risk does not depend directly on the movement of market yields. C. Even if the term structure is flat, interest rate risk could go up or down based on the level of the term structure at the time market yields decrease.
【正确答案】
A
【答案解析】If market yields decrease, interest risk will increase since the duration or the sensitivity of the bond to interest rate fluctuation will increase.