What are the effects of interest rate on bond rate
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If market interest rates rise, then the price of the bond with the 2% coupon rate will fall more than that of the bondwith the 4% coupon rate. purchase bonds in a low-interest rate environment. A bond's maturity is the specific date in the future at which the face value of the bond will be repaid to the investor.
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A bond's yield is based on the bond's coupon payments divided by its market price; as bond prices increase, bond yields fall. Falling interest interest rates make bond prices rise and bond yields fall. Conversely, rising interest rates cause bond prices to fall, and bond yields to rise
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