Interest rate and value of bond
This query is : Resolved
05 November 2012
Why does increase in interest rate lead to fall in the value of bond and Vice-verse?
05 November 2012
In my opinion, If interest rate rises than holders of bonds who are committed to receive a fixed rate of interest can not take advantage of such rise and hence the value of bond falls down and opposite happens in case of reduction in interest rates.
06 November 2012
How holder of bond cannot take advantage of rise in interest rate.
06 November 2012
Suppose, you have already Purchased a bond the interest rate of which is 10%.suppose the market rate at the time of purchase of bond was 8%, later on the market rate went up to 12%.will your bond interest rate will also rise to 12%? Answer is no, because you have already committed to a fixed rate of interest irrespective of market rate of interest. I hope you understood.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- TDS 194-T applicability
- Fixe term employment
- Is any professional CA is here please reply
- GST ITC REVERSE
- EXPORT BILL UNDER LUT FREIGHT CHARGE INCLUED IN INVOICE IT LIABLE TO TAX
- Putting a heading on received mail
- Reprocessing of rectification order AY 2025-26
- Foreign lottery ticket bought online from India: legality, tax and consequences
- Section 50-fixed asset-->building ceases to exist
- Tax Audit u/s 44AB for Transport Business A proprietorship is engaged in transportation business and
- Regime change
- Consolidated financials
- Goods sold but invoice not issued
- Tally: Imported bank entries do not show up in manual reconciliation
- Sales of goods of amount Rs97 lakhs to a party
- Confused About My Career After 12th — Cyber Security, AI or Finance? Need Guidance
- STATUTORY AUDIT OF A SMALL PRIVATE COMPANY INCORPORATED ON 28.03.2025
- Guidance Needed: Linking Multiple Form 26QB Payments and Responding to ITD Defaulter Notice
- How to pay remaining amount of TDS after due date?
- Resigning a auditor from the company for misconduct
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
