Select an option above to see an explanation here.

A) A direct relationship would mean that as interest rates increase, bond prices also increase, which is incorrect. When interest rates rise, bond prices fall.
B) Saying there is no relationship between bond prices and interest rates is incorrect. They are inversely related.
C) A proportional relationship would imply that bond prices and interest rates increase and decrease at the same rate, which is not the case.
D) Interest rates and bond prices have an inverse relationship: when interest rates rise, bond prices fall; when interest rates fall, bond prices rise.