#bond-valuation #bonds #finance #yield-curve
When the yield curve is steep, the bond is predicted to have a large capital gain
in the first years (dubious, innit?) before falling in price later.
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Yield curve - Wikipedia, the free encyclopediaty become its new market rate. Because a bond is always anchored by its final maturity, the price at some point must change direction and fall to par value at redemption.
A bond's market value at different times in its life can be calculated. <span>When the yield curve is steep, the bond is predicted to have a large capital gain in the first years before falling in price later. When the yield curve is flat, the capital gain is predicted to be much less, and there is little variability in the bond's total returns over time.
Rising (or falling) interest rates rar
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