And only one in five knew that when interest rates rise, bond prices fall.
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The problem is that as interest rates go up, bond prices fall in value.
This is why bond prices fall when interest rates rise, and why bond prices rise when interest rates fall.
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Many companies, seeing their bond prices fall, would likely be forced to offer the market higher interest rates to bring them back to the table.
And there is another snag: if interest rates rise, and bond prices fall, many financial firms might be forced to record huge losses, or even to close down altogether.
For if as a result of the subordination Spanish bond prices fall enough, then the banks become bust once again and also the Spanish state is facing interest rates too high for them to be able to roll over debt as it becomes due.
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If rates rise quickly, bond prices could fall sharply and cash could start to earn higher yields.
As falling confidence causes bond prices to fall, interest rates become exorbitant and destroy equity valuations.
But if inflation rears its head, those bond prices will fall and those portfolios will lose cash and income.
The common understanding is that as rates rise, the bond prices will fall.
That might in turn mean that both share and bond prices would fall.
Bond prices would fall (and thus yields rise) as investors worried that they would be paid back in a debased currency.
Of course, when the flows reverse, bond prices will fall, yields will climb, and a tidal wave of dollars will wash up on American shores, drowning consumers in a sea of inflation.
The fear now is that bonds may be nearing the end of a 30 year bull market run, and if interest rates start to rise to more normal levels, bond prices could fall quickly.
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After an attempted rally ran out of steam this week, Treasury-bond prices resumed their fall, and yields their rise.
While most Italian households typically hold government paper to maturity, they could suffer hefty losses if bond prices continue to fall, as they have in recent months.
If bond prices continue to fall, the enthusiasm to take on more risk in equity will wane as investors seek similar returns in the higher credit quality treasury bonds.
When bond yields rise, their prices fall, eating into any gains from the security's coupon.
When the Fed begins to unwind the huge portfolio of Treasuries and mortgage backed securities, there will likely be a sharp discontinuous increase in interest rates resulting in a sharp fall in bond prices especially high yield bonds.
Yields fall when bond prices rise.
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The immediate cause of the sharp fall in bond prices seems to have been rooted in the byzantine world of Italian politics, and in particular, an acrimonious spat between Silvio Berlusconi, the prime minister, and Giulio Tremonti, the finance minister, over provisions in an emergency budget.
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In theory, such a huge increase in purchases should cause bond prices to rise and yields to fall.
But none of these factors, even if taken together, explains the fall in corporate-bond prices.
Bill Gross, a fixed-income champion at Pimco, an American asset-management firm, predicted last September that bond returns will outstrip equities until share prices fall to their fair value, that is, until the Dow Jones Industrial Average is at 5, 000 rather than today's 8, 000-odd.
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Some of their other debt has been down-graded by bond-rating agencies, and their stock prices continue to fall.
But inflation won't come without a similar rise in interest rates and yields, which means that bond prices, which move in the opposite direction, should eventually fall.
If actual growth proves to be better than forecast, then bond yields should rise and prices for the 10-year Treasury note should fall.
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All the while, regulators have to worry about Japan's own economy, and about the risk that prices of government bonds may fall, damaging banks' huge bond portfolios.
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