By MOFSL
2023-05-31T10:38:54.000Z
4 mins read
What is The Relationship Between Bond Yield And Bond Price
motilal-oswal:tags/stock-market
2023-05-31T10:39:46.000Z

bond yield and bond price

Introduction

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What are Bond Prices and Bond Yields?

What are Premium and Discount Prices?

Why are Bond Yields Important?

What is the Relationship Between Bond Price and Bond Yield?

Yield= (Coupon/Market Price of Bond) X 100

What is the Reason Behind the Inverse Relationship?

FAQs

1. What is the bond price?

The bond price is the current value of the future cash flows related to the bond. These rise and fall with the market rates, demand, and supply.

2. What are coupon rates?

They are entirely based on the bond’s face value and the interest rates the issuer has to pay the buyer at regular intervals.

3. What is the face value of a bond?

Face value is the money that is paid by the bond issuer to the holder at the time of the bond's maturity.

4. What is the yield to maturity?

It refers to the total return that a bond can provide if held until its maturity period.

5. What is a bond yield?

Represented as a percentage, bond yield is the expected earning of a bond over time.

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