kendramalpass kendramalpass
  • 14-11-2019
  • Business
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What is the relationship between a non-callable, option-free fixed rate bond's price and its yield?

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fernandoalonsoc
fernandoalonsoc fernandoalonsoc
  • 14-11-2019

Answer:

The relationship is that the price for these types of bonds is lower as the Yield is fixed and do not change over time.

The price of a Non-callable bond is cheaper than the price of the Callable bond as the Yield for a Non-callable bond is fixed. This suggest that the investor knows exactly what is the interest that is going to receive until the maturity of the bond.  

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