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Question 
Why are bond prices inversely related to interest rates ?
 Question Submitted By :: Kradha75
I also faced this Question!!     Rank Answer Posted By  
 
  Re: Why are bond prices inversely related to interest rates ?
Answer
# 1		 
As the interest rate increases the price value of bond 
decreases. This is due to increase in interest rate 
encourage the investors in investing Bank deposits over 
which they get return with very minimal risk. Hence the 
demand for Bond will come down which leads to decrease in 
bond price.
 
Is This Answer Correct ?    6 Yes 0 No
Sivaguru G
 

 
 
 
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