as market interest rates increase, bond prices decrease  true or false?
817950
It's an inverse relationship so as rates increase - prices decrease and vice versa.
353475
as we continue to import more than we export and borrow in the world financial markets to do so, the value of a dollar (which is bases on the value of our economy) will continue to decline as it has been doing for the last few years. it's only a matter of time until interest rates creep up to offset those declines. unclear if the declining value of the dollar will also lead to inflation or if the slowdown in our economy due to rising interest rates will offset it.
43434
No, it levels out.  Drastic increases only happen every 10 - 20 years.  Some local things may effect a large change but the economy won't.  The present rise in Real Estate has a lot to do with the interest rates being so low for so long, and with the help of some politician land owners hiking prices it causes a snowball effect.  You'll see a gradual increase but look at the supply and demand, and the over pricing that's going on right now.  It's baseless and will take a few years to catch up.
496967
There's actually some debate about this.  Traditional wisdom says that high interest rates lower capital outflows and low interest rates increase it.  But if the raising of interest rates comes close to a possible default, the risk premium will make the capital account worse off.
169339
Because the future cash flow (the repayment) for a long-term zero coupon bond is discounted over a longer period of time. This will result in a greater fluctuation in price market interest rates change.\n\nFor example, assume bond A is a $100,000 zero coupon bond that matures in one year. Assume the bond is sold when market rates are 5%. This would mean that the bond price is about $95,238 (100,000/1.05). If, a few minutes after it was sold interest rates jumped to 10%, the bond price would fall to to $90,909 (100,000/1.10).\n\nAssume that bond B is a $100,000 zero coupon bond that matures in 10 years. Assuming the same rates above, the bond would have a selling price of $61,391 (100,000/(1.05)^10). However, when rates rise to 10%, the bond's price would plummet to $38,554 (100,000/(1.10)^10).\n\nNotice how much more sensitive the long-term bond is to changes in interest rates. Its price changes dramatically.
582574
The interst rate has gone up and probably will again in another months time. I would suggest to wait....
781577
c\n\nIf you go to the site listed below and look at the section entitled "Cost of Debt" you will see the detectability of interest payments begin mentioned.  Since in your question the debt is increased, I believe that "c" is the correct answer.\n\nI hope that this helps.
54607
The general trend of interest rates is moving upward (some analysts said this). Since the price of bond and interest rate has an inverse relationship, hence if r increases then price of bond decreases. Given the assumption that r is increasing, the current price of your bond holdings will be most likely to go down and hence you will incur a loss. This is what we call interest rate risk when one is holding a position in bond. For more research topic on bond risks, go to http://www.investopedia.com. Gud luck
593016
As I understand, it is shifting asset allocations.\nMostly seems to be fee based turnover of funds from here to there!
688950
the short answer is inflation . when inflation is high the fed will raise the interest rate to combat and try to slow down inflation .
785998
False.  Inflation decreases your purchasing power.  And it also decreases the value of your debt.
938581
There is somewhat of a relationship.  If interest rates rise dramatically as they did in the early 80s, people will tend to invest their money in interest bearing instruments rather than gold and the price of gold will fall.  When interest rates are very low as they currently are, gold becomes a much more attractive investment relative to interest bearing investments and the price of gold tends to increase.
293604
If interest rates drop, the company can pay off the bondholders and float a new issue at lower rates. Some bonds are not callable at all or after a certain time frame. This is an important point to check prior to buying bonds.
317342
Most important is probably the S&P/Moody's ranking.  The higher/safer the ranking, the lower the interest rate that it has to pay.  Over time, if the ranking changes, then the value of the bond changes.  Changes can come from the company doing well/poorly over time.\n\nGeneral interest rates also determine the value.
1102113
The rise in rates was expected -- so had no effect at all on the stock market.\n\nWhat did have an effect is the statement that the Fed made when they announced the rate increase.  They said that in the future they would consider both the state of the economy and inflation when deciding where to set rates.  They also indicated that their actions are curbing inflation and that the economy is improving.\n\nThis was considered good news.
809503
The yields on government bnds fluctuate almost on a daily basis and especially during monthly interest rate revisions. Therefore, the same bond bought at different times would yield a different return. \n\nHope this helps.\n\n\nhttp://www.mastersoequity.com\n\n\n.
61506
When interest rates are going up, avoid long-term bonds.  You might want to look at I Bonds as the rate will vary every 6 months.