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What is the relationship between interest rates and bond prices?
Answered By Editor
The relationship of bond prices and interest
rates is an inverse relationship. For
example, a bond with 6% interest will meant
that it pays $60 annually per $1000 of face
value.
This means that if the interest rate
increases, the annual payment will also
increase, depending on the face value of the
bond.
keywords: Bond | Bonds | Financing | Stocks | Interest Rate
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