Which protection is most valuable to a bond owner when bond prices are generally:

A) rising.
B) falling.
C) stable.



Answer :

Final answer:

Interest rate risk is a vital consideration for bond owners, with stable interest rates being the most favorable scenario.


Explanation:

Interest rate risk is a crucial factor for bond owners, as rising interest rates can lead to a decrease in the market value of their bonds. Thus, stable interest rates are most favorable for bond owners as they ensure the value of the bond remains relatively consistent.


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