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Talk Your Book: Betting on Duration

Animal Spirits Podcast

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The Impact of Interest Rate Changes on Bond Prices and Yields

This chapter explores the relationship between interest rate changes and bond prices and yields. The speakers discuss the effects of falling and rising interest rates on bond prices, as well as the implications for yields. They also delve into the concept of convexity and its influence on bond prices, and discuss the reinvestment of coupon payments. Additionally, they analyze different interest rate scenarios and offer insights on maximizing gains in specific bond durations.

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