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Why are bond prices inversely related to interest rates ?
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Answer Posted / sivaguru g
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 ? | 24 Yes | 5 No |
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