Interested to Buy Any Domain ? << Click Here >> for more details...
Why are bond prices inversely related to interest rates ?
- 5 Answers
- 21630 Views
- ICFAI, I also Faced
- E-Mail Answers
Answer Posted / vidit johri
bond prices = p.v of (coupon payments + redemption value)
the above payments are discounted by current
interest rates...
eg if roi is 5 % then the coupon payment due after 1yr
would b C.P/(1+.05)
SO if rates increase to 7% then the picture wud b
C.P/(1+.07)
hence the PRESENT VALUE OF THE BOND DECREASES....
THEREFORE THEY ARE INVERSELY PROPOTIONAL...
| Is This Answer Correct ? | 4 Yes | 1 No |
Post New Answer View All Answers
HI ,MY QUALIFICATION B.A. + PGDCA AND TRAINED ON JAVA . NOW I WANT TO KNOW TO GET JOB SOON WHICH COURSE I HAVE TO LEARN ?
What is the full form of swift?
What do you mean by term 'Loan Maturity' and 'Yield'?
Why you want to join NABARD?
What are the different departments in RBI?
What is 'overseas banking'?
What is a lease agreement? What are its contents?
Any idea about 'Freedom of Religion'?
Which is the new instrument launched by rbi to protect the saving of poor and middle class people from inflation and insensitive household sectors. What are the general techniques used by sccs?
What is working capital and how is it calculated?
Share your views on Business Cycles?
I HAVE TO APPEAR IN A INTERVIEW FOR THE POST OF SENIOR ASSISTANT-FINANCE , PLEASE SUGGEST ME WHAT TYPE OF QUESTIONS THEY SHOULD ASK ME .
What is 'laghu udhami credit card (lucc) scheme and its features?
State some points of Union Budget 2017?
Define PLR?
