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- Define bond yield to maturity. Why is it important?What is the relationship between bond prices and interest rates? Describe how this link came to be developed in detail. How can we utilize this connection to determine the value of a bond?What relationship exists between bond prices and interest rates? Explain how you came to make this link. What approach may we use to determining the bond's value based on this relationship?
- What is the relationship between bond prices and interest rates? Explain in fully how this relationship was formed. What is the best way to evaluate the worth of a link in light of this connection?Justify and give your comment based on the following statements: (ii) Bond price is positively correlated with the market interest rate.1. How are interest rates determined? Discuss and explain the interest rate equation and its components.