Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. what happens to the price of an existing bond (in

What happens to the price of an existing bond (in the secondary markets, which are typically...

70.2K

Verified Solution

Question

Finance

What happens to the price of an existing bond (in the secondarymarkets, which are typically over-the-counter) when interest ratesrise across all maturity lengths?

Answer & Explanation Solved by verified expert
3.9 Ratings (414 Votes)
Bond prices fluctuate in the secondary market just like any other security The main cause of changes in bond prices is changing interest rates When interest rates rise bond prices fall and when interest rates fall bond prices rise However how much bond prices changes with interest rates depends primarily    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

What happens to the price of an existing bond (in the secondarymarkets, which are typically over-the-counter) when interest ratesrise across all maturity lengths?

Other questions asked by students

Q

1. When an individual receives antibodies that were produced by another person, or animal, providing short lived...

Medical Sciences
Q

In a pharmaceutical application distilled water with a flow rate of 34560 kg/hr is to cool...

Mechanical Engineering
Q

Please do not use this as an example: Suppose a company printed baseball cards. It claimed...

Basic Math
Q

P 16-9 on september 30,2017, Gargiola inc. Issued 4millions of 10 year, 8% convertible bonds for...

Accounting
Q

Which of the following statements is NOT true about the curve defined by the parametric...

Calculus
Q

[One word answer]. A pool describes a quantity discount for buying...

Accounting
Q

regulation of financial reporting, as established through the Securities Act of 1933, Securities Exchange Act...

Accounting
Q

A company that has been an S Corportion from its inception may:

Accounting
Q

Como la suposicion del periodo de tiempo y los principios de reconocimiento de ingresos y...

Accounting
Q

Exercise 9-11 (Algo) Computing payroll taxes LO P2, P3 Mest Company has nine employees. FICA...

Accounting
Q

To calculate the number of years until maturity, assume that it is currently January 15,...

Finance
Q

how is cost behavior analysis important to the management of an organization?

Accounting