Explore BrainMass

Explore BrainMass

    Relationships between interest rates and bond prices

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    What is the relationship between interest rates and bond prices?
    When must the yield to maturity of a bond equal the current yield?
    What makes some bonds sell at a premium while others sell at a discount?

    © BrainMass Inc. brainmass.com June 3, 2020, 8:06 pm ad1c9bdddf
    https://brainmass.com/business/bond-valuation/relationships-between-interest-rates-and-bond-prices-123815

    Solution Preview

    1. Bond prices are related inversely to interest rates, i.e., when interest rates go up, bond ...

    Solution Summary

    This solution answers three questions concerning bond valuation, addressing interest rates, bond prices, yielding to maturity and premium vs. discounted bonds.

    $2.19

    ADVERTISEMENT