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In: Economics

Explain why there is an inverse relationship between the price of bonds and the interest rate,...

Explain why there is an inverse relationship between the price of bonds and the interest rate, or yield, on bonds. (Remember that simply stating there is an inverse relationship is not the same as explaining why the relationship is inverse). It might be best to use an example here.

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Expert Solution

Ans : there is inverse relationship between bond price and interest rate due to opportunity cost of investment.

Explanation:

Rahul Sunny answered 2 years ago
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