There is an inverse relationship between interest rates and bond values, and between the amount of coupon payments and weighted average life.

Question

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As interest rates in the market rise, the price of the bond will decline because the present value of the cash flows is worth less at a higher discount rate. The opposite is true if interest rates decline. The higher the coupon payments relative to the maturity payment, the shorter the weighted average life of the payout. The weighted average life refers to the time period over which the coupon payments and maturity payment on a bond are recovered.

There Is an Inverse Relationship Between Interest Rates and Bond