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Busıness Fınance I
BUSINESS FINANCE I Dersi Valuation of Bonds and Stocks soru cevapları
BUSINESS FINANCE I Dersi Valuation of Bonds and Stocks soru detayı:
SORU:
What kind of a relationship is there between the value of bonds and market interest rates?
CEVAP: There is an inverse relationship between value of bonds and market interest rates. As market interest rates increase, the present value of future cash flows declines and the value of bond decreases. Conversely, if market interest rates decrease, the present value of future cash flows increases and the value of bond increases.
There is an inverse relationship between value of bonds and market interest rates. As market interest rates increase, the present value of future cash flows declines and the value of bond decreases. Conversely, if market interest rates decrease, the present value of future cash flows increases and the value of bond increases.