cchang

thanks to both of you for your replies. I guess I am confusing with the terminologies. just to clarify, yield is not the same as interest. yield is the return that you get. as in if the pv of a par value 1,000 is 950 than my yield is expected to be 50?

thisisbrianly Wrote:
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> "If rate rises than the PV of the bond will be at
> discount, how come interest rate yields on longer
> maturities will be high? "
>
> You answered your own question here. As you said,
> when interest rates rise, the PV (or price) of the
> bond will be at a deeper discount, so the yield
> will be higher. Buying a $1000 par-value bond for
> $600 will have a higher yield than buying it for
> $800.