FINANCE 320 – An investor may buy into the bond market when prices are dropping
An investor may buy into the bond market when prices are dropping because they can be sold for a profit when prices rise. There is an inverse relationship between price and yield of fixed-income securities so when interest rates fall, bond prices rise. An investor who wishes to profit in this manner will need to purchase bonds when interest rates are high and sell when rates decline.
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FINANCE 320 – An investor may buy into the bond market when prices are dropping
An investor may buy into the bond market when prices are dropping because they can be sold for a profit when prices rise. There is an inverse relationship between price and yield of fixed-income securities so when interest rates fall, bond prices rise. An investor who wishes to profit in this manner will need to purchase bonds when interest rates are high and sell when rates decline.
Previous answers to this question
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