Question

What are the effects of interest rate on bond value?

Answer 1

Whether the interest rate movements are caused by Federal Reserve actions, economic conditions or inflatio

Answer 2

Hey there,

The relationship among bond values and interest rates is inverse to each other. When one increases, the other decreases and vice versa. When new bond are issued and introduced in the market, their rates usually match to the already prevailing rates at that point in time. The reason is that have a negative effect on the average price of bond and this destructive influence is known as bet asset.

I hope the answer is helpful.

Thanks