Some universities now offer “tuition bonds.” Parents can purchase a bo

Some universities now offer “tuition bonds.” Parents can purchase a bond at the time their child is born. The bond is redeemable in 18 years for an amount of money equal to the cost of the university’s tuition at that time.

Which of the following would reduce the market price of these bonds? A) An increase in the rate of interest
B) A decrease in the rate of interest
C) The passage of legislation limiting increases in college tuition to the rate of inflation
D) both A and C
E) both B and C

ANSWER

D