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Still not quite sure what the question is.

Posted on: September 11, 2022 at 21:48:40 CT
JeffB MU
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Are you talking about prices of the individual bonds & how that affects bond funds?

Or prices/inflation affecting interest rates?

If you are talking about how moves in interest rates affect the prices of individual bonds that is basically a mathematical formula.

If someone was looking to buy a bond and interest rates on a 10 year treasury went up to 3.5% he would pay less for one that was yielding 3%. The price of that bond would have to drop to the point that it would give him a 3.5% yield or he would buy one that was paying market rates.

On the other hand if someone had one paying 3.5% and rates dropped to 3% that bond would fetch a premium to the point that at that higher price it would in effect yield 3% for him all other things being equal.

Of course all of that would vary with each individual bond, quality & length of the term that was left etc.

The value of the bond fund would go up or down based upon the value of the underlying bonds in the portfolio.
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MESSAGE THREAD

     Something I should know but don't. Do prices - GA Tiger MU - 9/10 05:15:38
          Are you talking about stock prices? (nm) - JeffB MU - 9/10 11:06:53
               Mainly about bond funds. I think its int. rate - GA Tiger MU - 9/10 14:53:40
                    Still not quite sure what the question is. - JeffB MU - 9/11 21:48:40
                         That seems to answer it, though not sure about - GA Tiger MU - 9/13 05:37:29
                              Bond values ARE affected by interest rates. The more rates - JeffB MU - 9/13 10:20:59




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