When market interest rates rise, the price of a bond decreases, and its yield increases. This is because the fixed coupon rate of the bond becomes less attractive when compared to newly issued bonds that offer higher coupon rates. The yield of a bond is calculated by dividing the bond's coupon payments by its market price. Therefore, when bond prices increase, bond yields decrease, and vice versa. In this scenario, the increase in market interest rates would make the bond's fixed coupon rate less attractive, leading to a decrease in the bond's price and an increase in its yield.

Choice A is incorrect. An increase in market interest rates would not cause the bond's price to increase and its yield to decrease. In fact, the opposite is true. When market interest rates rise, the price of existing bonds falls because they become less attractive compared to new bonds that are issued with higher coupon rates (interest payments). Consequently, the yield on these existing bonds increases as their prices fall.

Choice C is incorrect. It's not accurate that both the bond's price and yield will increase if there is an increase in market interest rates. As explained above, when market interest rates rise, it leads to a decrease in bond prices while causing an increase in yields.

Choice D is incorrect. This choice suggests that both the bond's price and yield will decrease with an increase in market interest rates which contradicts basic principles of bond pricing and yields. As previously mentioned, when market interest rates rise, it results in a decrease in bond prices but causes an increase in yields.