many of you have made the point correctly that bonds can offer a way to balance

Question

many of you have made the point correctly that bonds can offer a way to balance a portfolio against stocks. This is because bonds' values tend to move inversely to stocks. Why that is we can get to in a bit. To help us get there let's discuss 'approximate value'. What do we mean when we talk about a bond's approximate value? Let's calculate the "approximate value" of a bond. If we have a $1000.00 bond that is paying us 10%, and the market shifts to offer $1000.00 bonds that pay only 8%, how much can we sell our bond for (what is our bond's approximate value)?

Explanation / Answer

http://money.cnn.com/magazines/moneymag/money101/lesson5/index5.htm

Related Questions

Navigate

• Browse (All)
• Browse M
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.