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F303 – Intermediate Investments
Interest Rate Sensitivity andBond Duration
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Outline of This Subject
Interest rate risk.Interest rate sensitivity.Concept of Duration.Calculating Durations.Rules of Duration.
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Interest Rate Risk
There is an inverse relationship between bondprices and yields –high yields imply low prices.This relationship becomes fundamental whenconsidering that interest rates fluctuatesubstantially.The capital gains or losses that result from theseinterest rate movements, make investment risky.This is true even if the coupon and principalpayments are guaranteed.
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3067972-Bond-Basic
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| Rating: | (2 Ratings) |
| Upload Date: | 07/25/2009 |
| Copyright: | Attribution Non-commercial |
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