Topic: Bond Prices and Interest Rates
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Answers to Common Questions
Why Do Bond Prices Fall When Interest Rates Rise?
Companies and governments sell bonds at the par value with a stated interest rate. However, since bonds can be traded like stocks, the resale price will vary with market prices. Read More »
Source: http://www.ehow.com/facts_5939280_do-fall-interest-rates-rise_.ht...
What Happens to Bond Prices When Interest Rates Go Up?
Bonds are debt instruments issued by corporations and governments. In exchange for buying a bond, the bond issuer agrees to pay you a set interest rate until the bond matures. When it reaches its maturity date, the bond issuer pays you the ... Read More »
Source: http://www.ehow.com/about_7285535_happens-interest-rates-go-up_.h...
How Do Interest Rates in the Economy Affect the Price of a Corpor...
A corporate bond is a marketable security that can be dramatically affected by market interest rates. Although the payments on most corporate bonds are fixed, in terms of interest rate and in the duration they will be paid, the price of a b... Read More »
Source: http://www.ehow.com/about_6128505_do-affect-price-corporate-bond_...
More Common Questions
Answers to Other Common Questions
There is an inverse relationship between nterest rate and Bond Price. If bond price increases, the interest rate decreases and vice versa.
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Source: http://wiki.answers.com/Q/What_is_the_impact_of_interest_rate_mov...
1, bond price move inversely to interest rate 2. a decrease in yield results in a larger change in price than increase in yield 3. change in yield, long term bond price changed more than the short term bond 4. bond price increases with matu...
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Source: http://wiki.answers.com/Q/What_are_the_factors_that_influence_the...
There is an inverse relationship between price and yield: when interest rates are rising, bond prices are falling, and vice versa. The easiest way to understand this is to think logically about an investment. You buy a bond for $100 that pa...
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Source: http://wiki.answers.com/Q/What_is_the_relationship_between_intere...
The interest rate on a bond is called the state rate. However, your actual return will vary based on how much you pay to purchase the bond.
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Source: http://www.ehow.com/facts_5939803_interest-rate-bond-called_.html
If you buy a bond with say a 4% coupon at par when bonds of that maturity and quality are paying 4% and then market rates for that maturity and quality bond rise to say 5%, the price of your bond must drop so that the yield to the buyer equ...
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Source: http://wiki.answers.com/Q/Why_does_the_bonds_prices_decrease_when...
An interest rate swap is an exchange between different cash flows. One cash flow stream is fixed and the other variable, but they both revolve around the current cost of money, or the interest rate. Market dynamics that affect the price of ...
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Source: http://www.ehow.com/how_5135612_price-interest-rate-swap.html
A floating-rate note (FRN) is a note with a variable interest rate attached. Adjustments to the interest rate are made on an annual or semiannual basis. The amount of the adjustment usually depends on the index the rate is tied to. For inst...
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Source: http://www.ehow.com/how_5908797_estimate-floating-interest-rate-b...
