소개글
[재무관리] How do interest rate changes affect bond prices(영문)에 대한 자료입니다.
목차
1. Definition
- The base interest rate
- Effect of interest rates on bond
- Exception
2. Domestic examples
- Common cases
- Unexpected cases
- Under what circumstances should change interest rates?
3. Foreign examples
- Foreign cases
- Prospect
본문내용
A case of interest rates rise, but bond prices fell.
Interest rate changes impact on bond prices in the different economic conditions.
Base interest rate raising when uneasily economic conditions can getting decline in market interest rates.
When market interest rates decrease bond prices has increases.
Therefore, when interest rates rise, sometimes the price of bonds rises.
In addition to an exception occurs depending on market conditions besides of that case.
Reason
1. According to economic conditions, it is different to impact on bond market.
2. Regardless of whether benchmark rate raise, this decision relieve the uncertainty of currency policy. So, this point take will be positive in bond market.
3. Psychological factors : Investors always predict to future prospects.