Altaya, Alyssa Paula C.

v There is an inverse relationship between bond prices and interest rates in which as the bond prices
increases, the interest rates of the economy decrease, and as the bond prices decrease, the interest
rates of the economy increase vice versa.

v Bond prices refer to the face value of the bond or the price that you pay to purchase the bond and
when the bond matures, the principal will be payback.

v Higher interest rates of the bond are more attractive that will make the investors eagerly buy the
bonds.

v Increase in interest rates will result in a decrease in profits and demand affecting the bond price to
decrease also.

v A decrease in interest rates will result in an increase in profits and demand affecting the bond price to
increase also.