The Relationship between Bond Price and Yield
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The fundamental relationship between bond price and yield is that they relate to each other inversely. How is this so?
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This solution defines the relationship between bond price and yield. It include a reference for further investigation.
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"The most important bond pricing relationship to understand is the inverse relationship between bond prices and interest rates (or bond yields)—as interest rates rise, bond prices fall and as interest rates fall, bond prices rise.
It is also important to recognize that interest ...
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