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What would the effect of a decline in interest rates on those instruments have on their price?

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n the early 1980s, interest rates on long-term debt were at remarkable levels ? above 15% with some even higher. Within a decade, rates had dropped precipitously. I have a couple of questions about that;What would the effect of a decline in interest rates on those instruments have on their price?;What impact would that decline have on other financial instruments? (Mortgages, Money Market Instruments, Stock);What does the change in prices after a significant change in interest rates say about the relationship of price and interest rates?;Most of the bonds that had been issued in the early 1980s were no longer on the market by the mid-1990s. Why do you suppose that is?

 

Paper#26452 | Written in 18-Jul-2015

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