Monday, September 26, 2011

Daily Review--Bond Prices

Watch this video. Answer the question following.

Watch the full episode. See more PBS NewsHour.

How are bond prices and interest rates related? a. Directly b. Inversely If you answered "b" then you answered right. As bond prices increase, the interest rate falls. From the video, bond prices are rising as more and more investors seek safety in US bonds. As investors demand bonds the price increases keeping our interest rates at an historical low.

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