How would I be able to simplify how rates are quoted? 3. Even though rising interest...
How would I be able to simplify how rates are quoted? 3. Even though rising interest rates mean lower bond prices, does that mean lower bond total returns?
Homework Answers
Look interest rate and coupon rate are different things. There is simple concept that when interest rate rises then bond price falls and vice versa. Because while calculating the price of the bond we use interest rate not coupon rate. A bond which is higher prices will definitely have lower interest rate.
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