Which of the following statements correctly describes the relationship between existing bonds and interest rates?
a. The price of an existing bond has an inverse relationship with interest rates; bond prices decrease when interest rates increase.
b. If interest rates do not change, as the time approaches 0 (i.e. the bond approaches maturity) the price of the bond will drop.
c. The price of an existing bond has a direct relationship with interest rates; bond prices increase when interest rates increase
d. There is no relationship between the price of existing bonds and interest rates.
