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Relationship between interest rates and bond prices

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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?

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This solution is comprised of a detailed explanation to answer the relationship between interest rates and bond prices.

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The interest rates will determine the bond prices sold in the market. The bond's yield to maturity (YTM) is the interest rate generally discussed by investors. It is the total rate ...

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