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What is the importance of Bond Market?
Step by step
Solved in 2 steps
- why is there a market for bonds?What is interest rate risk, and how does it relate to callable bonds? Explain using an example of your own choosing.What is the relationship between bond prices and interest rates? Explain in fully how this relationship was formed. What is the best way to evaluate the worth of a link in light of this connection?
- Is having a call feature advantageous for a bond issuer? If so, why or why not?What is the relationship between interest rate level and bond price? Why must this relationship be true? How has the current rate environment impacted the prices of bonds?What’s the logic behind the bond-yield-plus-risk-premium approach?