Posts Tagged ‘Interest Rate’

How can an increase in the interest rate make bonds more attractive and reduce their price?

Sunday, March 7th, 2010
chocosonge asked:

The Demand for bonds
an increase in the interest rate makes bonds more attractive, so its leads people to hold more of their wealth in bonds, as opposed to money.
However, you also learned that an increase in the interest rate reduced the price of bonds.
How can an increase in the interest rate make bonds more attractive and reduce their price?

convertible bonds

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How to calculate the present values of two corporate bonds? What would be the risk investing in these bonds?

Monday, February 8th, 2010
Melissa asked:

First one issued 25 years ago at a coupon rate of 7% and the second 5 years ago also at a coupon rate of 7%. Both bonds have terms of 30 years and face values of $1,000. The interest rate on these today is at 10%.

convertible bonds

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