Why are bond prices inversely related to interest rates ?
Answer Posted / sharad kakkar
suppose the market interest rate is 5%....
u take a bond at this interest for 1000$......
suppose the market interest goes up to 7%
now the value(price) of yr bond will go down as it will be more profitable for ppl to invest in current new bonds @7%, so the market value of yr bond bought at 1000 $ will go down......
| Is This Answer Correct ? | 11 Yes | 0 No |
Post New Answer View All Answers
Explain Openpages Regulatory Compliance Management?
Give an example of Vertical combination,Horizental Combination of Merger?
What are the various banks take for women empowerment?
What causes Sub- prime crisis?
How many number of SBI branches are there in West Bengal ?
What is the Full form of CBS and what are the features and benefits?
what features you can use to convert data in encrypted form in Tally ERP9?
What is a listing in BSE?
Why is kyc important?
financial managers are responsible for obtaining and using funds in a way that will maximize the value of the firms. Please explain.
What are NPA? How can they be reduced?
Which committee had worked for the recapitalisation of regional rural banks (rrb’s)?
Tell something about current Five Year Plan?
What is budget?
Who are venture capitalists?