Janette can sell her bond up to $1500.
Janette purchased a bond for $500. This bond had a promised interest rate of 15 percent (15%).
Value of Bond = $500
Interest Rate = 15%
New/Updated Interest Rate = 5%
Value Of Bond after Change in rates = Upto $1500
If the interest rate of the market decreased to 5 percent (5%), Janette can sell her bond for up to $1500. There exists a relationship between the interest rates and the prices of bonds. When the market interest rate decreases the price of the bond rises, and if the interest rate increases, the bond's price decreases.
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