3 ms·
If interest rates went up 10% (hypothetical, I understand it won’t happen), what would the face value of an existing 10y bond be?
by deanmoriarty 4y ago
If interest rates went up 10% (hypothetical, I understand it won’t happen), what would the face value of an existing 10y bond be?
- shukantpal 4y agoApproximately drop by 50% if existing rates are near zero. That's because a 10% yield will double your money when a 10y bond matures. So existing bonds have to halve to double your money in the same way.
- deanmoriarty 4y agoSo the above poster's "Duration risk is (bps yield increase * years)" is not accurate?