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The price of a bond Falls and the anticipated return Rises, bonds come more seductive to investors and the volume demanded rises.
Let's now suppose about how bonds are impacted by interest rates. Interest rate and credit spread make up the maturity of a bond's yield. The interest rate is the base rate for all bonds nominated in a particular currency and compensates investors for their abecedarian profitable pitfalls, whereas credit spread indicates the idiosyncratic pitfalls related to specific issuers.
thus, if the request anticipates an increase in interest rates, bond yields will also increase, which will beget bond prices decline.
The price of a bond Falls and the expected return Rises, bonds become more attractive to investors and the quantity demanded rises.
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