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GARP 2016-FRR Exam - Topic 3 Question 15 Discussion

Actual exam question for GARP's 2016-FRR exam
Question #: 15
Topic #: 3
[All 2016-FRR Questions]

Which one of the following changes would typically increase the price of a fixed income instrument, such as a bond?

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Suggested Answer: A

by Leigha at Jan 05, 2026, 05:16 AM

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Merrilee
3 days ago
B is also a good option. As the time to maturity increases, the bond's price would rise to compensate for the longer holding period.
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Wilda
8 days ago
Definitely C. An increase in risk premium means investors demand a higher return, which drives up the price of the bond.
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Arlyne
13 days ago
I think the correct answer is C. Increase in risk premium would typically increase the price of a fixed income instrument.
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Amber
19 days ago
I think the risk premium usually means higher yields, which would lower bond prices, so that option seems wrong to me.
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Huey
24 days ago
I feel like an increase in demand for goods and services might not directly affect bond prices, but it could influence interest rates somehow.
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Paz
29 days ago
I remember practicing a question like this where increasing the time to maturity had a different effect, but I can't recall if it always leads to higher prices.
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My
1 month ago
I think a decrease in inflation rates would generally lead to higher bond prices, but I'm not entirely sure how that interacts with other factors.
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Cortney
1 month ago
I'm leaning towards C as well. Increased risk premium means the bond is perceived as riskier, so investors will pay less for it, driving up the yield and price.
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Donte
1 month ago
I'm pretty sure the answer is C. An increase in risk premium means investors require a higher return, which drives up bond prices.
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Marcos
2 months ago
Okay, let me think this through. If inflation decreases, that would typically increase bond prices. And an increase in time to maturity would also increase prices. But I'm not sure about the risk premium one.
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Stacey
2 months ago
Hmm, I'm not sure about this one. I know that changes in interest rates and inflation can affect bond prices, but I'm not confident about the other factors.
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Na
2 months ago
I think the answer is C. An increase in risk premium would typically increase the price of a fixed income instrument.
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