The correct answer is A. rises.
When interest rates rise, the value of existing bonds decreases. This is because investors can now earn a higher return on their money by investing in new bonds that pay a higher interest rate. As a result, they are willing to pay less for existing bonds.
The opposite is also true. When interest rates fall, the value of existing bonds increases. This is because investors can now earn a lower return on their money by investing in new bonds that pay a lower interest rate. As a result, they are willing to pay more for existing bonds.
Here is a table that summarizes the relationship between interest rates and bond prices:
| Interest Rates | Bond Prices |
| — | — |
| Rise | Fall |
| Fall | Rise |
I hope this helps! Let me know if you have any other questions.