Notesale: Turn your study into money

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Bonds & Interests Rates
Bonds and interest rates are considered two substantial parts of the macro
economics
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As of now, the concept of these two helps expand companies and
furthermore, brings revenue to the economy
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This is presented in a coupon that indicates the par
value, interest rates, time of maturity or period of the transaction and the time intervals
(ex: annually, semi-annually) in which partial interests are given
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It is one of the considered transactions in lending money
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One can usually encounter this in any profitable deal between two
bodies
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Now, the relationship between bonds and interest rates are somehow clear
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For example,
Jerry, an investor, recieves a coupon with the par value of $1000 with 10% interest per
year and is operational within 2 years/ semi-annually
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After a few days, Jerry
had a financial breakdown and is in need of financial support
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If, however, within that period, rate immediately went up
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This means that
people who purchase the exact same bond, this time, get a higher interest in return than
the ones who purchased it before
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This is, of course, due to the fact that his bond
offer less profit in return
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When dealing with a separate
individual, meaning out of the market, one should consider the following: if interest rates
go up, the significance of the coupon decrease; if the interest rates go down, the value of
the coupon increasesn

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