Sentences with phrase «existing bond prices»

Duration2 In general, as interest rates rise, existing bond prices usually fall, and vice versa.

A rise in interest rates will cause existing bond prices to go down.

Duration2 In general, as interest rates rise, existing bond prices usually fall, and vice versa.

Not exact matches

As interest rates rise, the prices of existing bonds fall in order to make the yield of their fixed coupons competitive in the market.

If interest rates rise, market prices of existing bonds will typically decline, despite the lack of change in both the coupon rate and maturity.

Interest rate risk If interest rates rise, the price of existing bonds usually declines.

Designed to go up when short - or intermediate - term U.S. Treasury bond prices fall, these two new ProShares join the existing 36 equity - benchmarked Short ProShares.

OID exists when a bond is issued at a price below its redemption value.

Market discount generally exists when a bond is purchased on the secondary market at a price below par.

Prices of existing bonds fall.

As a result, prices for existing bonds with higher interest rates tend to rise.

When interest rates go up prices of existing bonds go down.

Or we should expect gradual move toward nominal ZIRP that will drive prices of existing bonds higher due to «capital gains»?

That would drive down the price of existing bonds, which will appear less attractive compared to newer bonds with their higher interest payments.

Remember, interest rates and bond prices move in opposite directions, so rising rates mean lower prices for existing bonds.

But as the Fed retreats from its loose monetary policy, interest rates could climb, driving down the price of existing bonds.

Greater price risk now exists: The devil is always in the details, and price is an important risk that most corporate bond investors, in my opinion, are overlooking.

The former is a problem if interest rates are low (which they are now in the US) because existing bonds will fall in price if interest rates rise.

Bond prices and interest rates behave as if they are on opposite ends of a see - saw: as interest rates increase, the price of existing bonds decreases.

Over time, companies may be less likely to issue debt since it is more expensive, incrementally boosting existing debt's scarcity value and adding upward pressure to bond prices.

Many bond investors fear rising interest rates, because it drives down the price of existing bonds.

To equalize the market coupon rate, the existing bonds must fall in price.

If an existing bond receives a downgrade in its credit rating, it is less appealing to investors and they will require a higher interest rate to invest, which, again, occurs through a lowering of the bond price.

Interest rate risk is another concern for bondholders, since rising interest rates bring down the prices of existing bonds.

If market interest rates rise, then the price of an existing bond will likely fall because it pays a lower rate than you can earn by buying a new bond in the market.

When interest rates go up, the prices of existing bonds typically fall, which can also adversely affect the performance of a bond fund.

Conversely, if market interest rates fall, then the price of an existing bond will likely rise because it pays a higher rate than you can earn by buying a new bond in the market.

This is because existing bonds in the marketplace will have their prices bid up, because they're now «safer,» because the issuing firms are making more net profits, thus lowering the chances of defaulting.

A difference may exist between the prices buyers are bidding and the prices sellers are asking on large, actively traded bond issues.

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