Understanding Bond Variables and their Relationships

The video tutorial explains the inverse relationship between bond prices and yields, and how market interest rates influence bond yields. It covers the dynamics of bond markets using supply and demand curves, and provides a real-life example of how interest rates affect bond yields. The tutorial concludes with a calculation example to demonstrate the relationship between bond yields and market interest rates.

What is the relationship between bond yield and bond price?

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Explain how the bond yield is calculated.

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What happens to bond yield when the market price of a bond increases?

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Describe the impact of an increase in supply of bonds on their prices and yields.

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What is the significance of the inverse relationship between bond prices and yields?

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How do changes in market interest rates affect bond yields?

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How does the central bank influence bond yields?

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What occurs when investors expect interest rates to rise?

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Explain the calculation process for determining the market price of a bond.

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What is the expected market price of a bond if the yield drops to 3%?

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