What is the relationsip between bond prices and coupon rate?
Also, comment on the reasons that interest rates/yield to maturity on bonds change over time.
just a couple of sentences for each.
Bond best answer:
Answer by Mohammad
1. The "relationship between bond prices and coupon rate" can be explained by following equation:
Bond Price = (Coupon/Yield to Maturity)
2. Assuming coupon as 8%, Yield to Maturity of similar bond at 7.7% and face value $ 100, the price of a bond will be:
Price of Bond = (Coupon/Market Yield to Maturity) = (8/7.7) * 100 = $ 103.90
3. The "interest rates/yield to maturity on bonds change over time" in line with the interest rate structure in the country.
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Bond
barry bonds hits 744
Image by artolog
In another chapter in one of the biggest sports stories of the year, Giants slugger Barry Bonds, chasing Hank Aaron's major league career record of 755, pulls to within 11 yesterday. That's him on his way around the bases...
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