Question
In: Finance
Explain : why bonds do not maintain stable long-term price patterns ?
Explain : why bonds do not maintain stable long-term price patterns
?
Solutions
Expert Solution
Bonds do not maintain stable long - term price patterns because
Bonds are very sensitive to interest rate, if interest rate increases bond prices falls if interest rate decreases bond prices rises
There is an inverse relationship between bond price and interest rate.
Interest rate is a factor of supply and demand of credit and it's adversely affect the price of the bond.
jeff jeffy answered 2 years agoRelated Solutions
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