The most important elements influencing a bond's price are yield, maturity of long-term borrowings.
Bonds and the interest rates have a relationship that is inverse. Bond prices often decline when the cost of borrowing money rises (when interest rates rise), and vice versa.
The negative link between interest rates and bond prices appears odd at first look. However, with closer inspection, it really starts to make sense.
Bonds are long-term borrowings that are more expensive than short-term borrowings due to the higher risk of uncertainty associated with long-term borrowing maturities.
The maturity of long-term borrowings is the key element influencing bond cost or interest rate.
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