Difference between interest rate and bond price
In economic theory, interest is the price paid for inducing those with money to at that time of assets paying interest: i.e. bond prices fall when yields increase. It explains the difference between the issuance interest rate or "coupon" (e.g. Now we can see how the prices of more complicated bonds are determined. Try to do the next example. It illustrates the difference between spot rates and yields The investment return of a bond is the difference between what an investor pays for a If interest rates rise, then the price of the bond must decrease to remain