Discover what interest-on-interest means, how it's calculated, and its impact in bond investing. Learn the difference between ...
Most bonds pay a fixed interest rate, so existing bonds become more attractive if interest rates fall, driving up demand for them and increasing their market value. If interest rates rise, investors ...
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Effect of Interest Rates on Bonds
Interest rates and bond prices exhibit an inverse relationship: when interest rates increase, bond prices decrease, and when rates decrease, bond prices increase. This occurs because newly issued ...
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