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What is the relationship between bonds and market interest rate?

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Question ajoutée par Sultan Alghamdi
Date de publication: 2016/02/02
Abdulrahman Alharbi
par Abdulrahman Alharbi , Advisor , Saudi Industrial Development Fund, Riyadh, Saudi Arabia

Bond price has an inverse relation with market interest rate.

The relation between the two is an inverse relation.

Tonmoy Jony
par Tonmoy Jony , Customer Manager , GrameenPhone Ltd

The price of high quality bonds is directly related to interest rates. Investors looking to expand the diversity of a portfolio of stocks need to understand the relationship between prices and interest rates before buying bonds.

Joe Jukic
par Joe Jukic , Pricing Analyst , National Australia Bank

There is an inverse relationship between Interest rates and Bonds. That is because the majority of bonds are fixed at a set rate. When interest rates go up, bond prices need to go down in order to attract investors and provide a better yield.

Mohamed Sherif Abdelhamid  Youssef
par Mohamed Sherif Abdelhamid Youssef , Internal Auditor , Union Group Companies

Bond prices has an inverse relationship with interest rates in market

Mirza Danish Beg
par Mirza Danish Beg , Fixed Income Manager , Emirates Islamic Bank

Bonds and market interest rates are inversely related

Ajinkya Patil
par Ajinkya Patil , ICICI

Inverse for Int Rate and Bond Prices

Reason: If Interest rates move UP then older or existing papers will carry older rate(which is lower) so the prices will fall due to low demand and New papers will carry new (higher rate).

similarly if Int. goes down the the Older papers will trade at higher prices due to elevated demand.

Amr Lotfy
par Amr Lotfy , Senior Advisor , Keepers Advisory

there is inverse relationship between the fixed income  bond price and the prevailing interest rate in the market, if the market interest rate increases the fixed income bond price decrease  and vice versa.

Tarek Abd El-Hamid
par Tarek Abd El-Hamid , Chief Operating Officer , Zilla Capital for Investment

The market interst rates one of the important benchmark for the bonds

mohammed aldughesh
par mohammed aldughesh , Chairperson of cost department , King Fahad Medical City

The higher the interest rate ,the less the price

Michael Cavanaugh
par Michael Cavanaugh , Vice President , TradeStation Securities, Inc

When new bonds are issued, they typically carry coupon rates at or close to the prevailing market interest rate. Interest rates and bond prices have an inverse relationship; so when one goes up, the other goes down.

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