When the market rate of interest falls, which one of the following will happen?

For a fixed stream of promised payments, P=ΣCₜ/(1+i)ᵗ decreases with the discount ratei. A lower market yield therefore raises the existing bond's price. With fixed coupon, its current yieldC/P also falls. Price and yield move in opposite directions under unchanged credit and cash-flow conditions. Bond price and bond yield, both will rise Bond price and bond yield both will fall Bond price will rise and bond yield will fall Bond price will fall and bond yield will rise