Interest rates and bond price

    • [DOC File]Bond Prices and Yields - Salisbury University

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      When coupon rate < kd the bond sells at a discount (PRICE < Par) At maturity PRICE = Par for all values of kd. The longer the time to maturity the greater the premium (discount) Discuss the graph below. Bond fact #1: There is an inverse relationship between interest rates and bond prices. If interest rates increase, bond prices decrease.

      relationship between bonds and interest


    • [DOC File]Bond Yields and Prices

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      Bond price fluctuations (volatility) and bond coupon rates are inversely related. Implications. A decline (rise) in interest rates will cause a rise (decline) in bond prices, with the most volatility in bond prices occurring in longer maturity bonds and bonds with low coupons.

      us savings bonds rates chart


    • [DOCX File]Price Risk (Interest Rate Risk) - Tulane University

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      If each bond was selling at par prior to the increase in interest rates, the 5-year bond will now have a price of 91.89 while the 20-year bond will drop to 80.21. 5-year 6% coupon bond with an 8% BEY: 20-year 6% coupon bond with an 8% BEY:

      bond prices interest rates relationship


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