# Explain the four important relationships on bond valuation.

• First relationship
The price of a bond is inversely related to its yield-to-maturiy (YTM). Since YTM depends positively on the market interest rate, we can infer that as market interest rate increases (decreases), bond value decreases (increases). The change in value caused by changing interest rates is called interest rate risk.
• Second relationship
1. If the bondholder’s YTM equals the coupon interest rate, the bond will sell at par, or maturity value.
2. If the YTM exceeds the bond’s coupon rate, the bond will sell below par value or at a “discount.” This is called a discount bond.
3. If the YTM is less than the bond’s coupon rate, the bond will sell above par value or at a “premium.” This is called a premium bond.
• Third relationship
Longer-term bonds are exposed to greater interest rate risk than shorter-term bonds.
• Fourth relationship
Lower-coupon bonds are exposed to greater interest rate risk than higher-coupon bonds.
• Calculate the price
Pages (550 words)
\$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Lets Write For You
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend