The relationship between the bond prices and the interest rate is inverse. Thus if there is decline in the interest rate it leads to increase in the bond prices and vice versa.
As the interest rate goes up, the price of the bond decreases. At a 12% interest rate, the bond is valued exactly ...
The relationship between bond prices and interest rates is solidified.
Bond prices and interest rates: the relationship
Discuss 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?
Discuss how to use the tables to determine Present and Future Values, or Present Value and Future Annuities.View Full Posting Details