Research on the Interest Rate Risk Strategy of Bond Market

Research Article
Open access

Research on the Interest Rate Risk Strategy of Bond Market

Zekang Li 1*
  • 1 Hong Kong Metropolitan University    
  • *corresponding author s1238093@live.hkmu.edu.hk
Published on 13 September 2023 | https://doi.org/10.54254/2754-1169/16/20230978
AEMPS Vol.16
ISSN (Print): 2754-1177
ISSN (Online): 2754-1169
ISBN (Print): 978-1-915371-75-1
ISBN (Online): 978-1-915371-76-8

Abstract

Compared with stocks, bond investment can not only reduce relatively large risk losses, but also ensure that the investment status is healthy and stable. However, whether the product trend in the bond market can be used as a tool for monitoring economic conditions is a question worth pondering. This article’s main function is discussing why the bond market is useful and the influence and difference of bond’s maturity and interest rate for the economy and investor. Through the research and discussion of the article, the paper focused on the conclusion that the comparison of the interest rates of long-term bonds and short-term bonds in the bond market in the same period can reflect the overall economic situation of the market to a certain extent, and the significance of this conclusion is that, It can not only enable investors to observe the market trend through the interest rates of bonds of different maturities, and make choices for their next investment decisions, but also enhance the functionality of the financial market and strengthen the connection with the economic market.

Keywords:

bond market, finance, interest rate, interest rate risk

Li,Z. (2023). Research on the Interest Rate Risk Strategy of Bond Market. Advances in Economics, Management and Political Sciences,16,65-70.
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References

[1]. Gilmore, C. G., Lucey, B. M., & Boscia, M. W. Movements in government bond markets: A minimum spanning tree analysis.

[2]. Chy, M., & Kyung, H. The effect of bond market on bank loan contracting.

[3]. Shigemi, Y., Kato, S., Soejima, Y., & Shimizu, T. Market Participants' Behavior and Pricing Mechanisms.

[4]. Yao, D., Sun, R., & Gao, Q. The network structure in the Chinese bond market.

[5]. Liu, F., Kong, D., Xiao, Z., Zhang, X., Zhou, A., & Qi, J. Effect of economic on the bond market under the im-pact of COVID-19.

[6]. Kadıoğlu, E., & Frömmel, M. Manipulation in the bond market and the role of investment funds: Evidence from an emerging market.

[7]. Wahidin, D., Akimov, A., & Roca, E. The impact of bond market development on economic growth.

[8]. Abuelfadl, M., & Yamani, E. Currency news and international bond markets. The North American Journal of Economics and Finance.

[9]. Pagnottoni, P., Spelta, A., Pecora, N., Flori, A., & Pammolli, F. Financial earthquakes: SARS-CoV-2 news shock the bond markets.

[10]. Tran, N., & Uzmanoglu, C. COVID-19, lockdowns, and the municipal bond market. Journal of Banking & Finance.

[11]. Bond market’s connection with the financial market. https://www.ft.com/content/2ea215eb-c359-4a72-830a-1ecdd575b969.

[12]. John D. Burger, Francis E. Warnock, and Veronica Cacdac Warnock. Bond market development in develop-ing Asia, ADB Economics Working Paper Series, no. 448, August 2015. https://www.adb.org/sites/default/files/publication/173190/ewp-448.pdf.

[13]. Indeed Editorial Team, What Is an Organizational Strategy and Why Does My Business Need One? June 23, 2021. https://www.indeed.com/career-advice/career-development/organizational-strate-gy#:~:text=An%20organizational%20strategy%20is%20a,goals%20and%20develop%20strategic%20plans.

[14]. Nick Lioudis, The Inverse Relationship Between Interest Rates and Bond Prices, May 16, 2022.https://www.investopedia.com/ask/answers/why-interest-rates-have-inverse-relationship-bond-prices/.

Cite this article

Li,Z. (2023). Research on the Interest Rate Risk Strategy of Bond Market. Advances in Economics, Management and Political Sciences,16,65-70.

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About volume

Volume title: Proceedings of the 2nd International Conference on Business and Policy Studies

ISBN：978-1-915371-75-1(Print) / 978-1-915371-76-8(Online)
Editor：Javier Cifuentes-Faura, Canh Thien Dang
Conference website: https://2023.confbps.org/
Conference date: 26 February 2023
Series: Advances in Economics, Management and Political Sciences
Volume number: Vol.16
ISSN：2754-1169(Print) / 2754-1177(Online)

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References

[1]. Gilmore, C. G., Lucey, B. M., & Boscia, M. W. Movements in government bond markets: A minimum spanning tree analysis.

[2]. Chy, M., & Kyung, H. The effect of bond market on bank loan contracting.

[3]. Shigemi, Y., Kato, S., Soejima, Y., & Shimizu, T. Market Participants' Behavior and Pricing Mechanisms.

[4]. Yao, D., Sun, R., & Gao, Q. The network structure in the Chinese bond market.

[5]. Liu, F., Kong, D., Xiao, Z., Zhang, X., Zhou, A., & Qi, J. Effect of economic on the bond market under the im-pact of COVID-19.

[6]. Kadıoğlu, E., & Frömmel, M. Manipulation in the bond market and the role of investment funds: Evidence from an emerging market.

[7]. Wahidin, D., Akimov, A., & Roca, E. The impact of bond market development on economic growth.

[8]. Abuelfadl, M., & Yamani, E. Currency news and international bond markets. The North American Journal of Economics and Finance.

[9]. Pagnottoni, P., Spelta, A., Pecora, N., Flori, A., & Pammolli, F. Financial earthquakes: SARS-CoV-2 news shock the bond markets.

[10]. Tran, N., & Uzmanoglu, C. COVID-19, lockdowns, and the municipal bond market. Journal of Banking & Finance.

[11]. Bond market’s connection with the financial market. https://www.ft.com/content/2ea215eb-c359-4a72-830a-1ecdd575b969.

[12]. John D. Burger, Francis E. Warnock, and Veronica Cacdac Warnock. Bond market development in develop-ing Asia, ADB Economics Working Paper Series, no. 448, August 2015. https://www.adb.org/sites/default/files/publication/173190/ewp-448.pdf.

[13]. Indeed Editorial Team, What Is an Organizational Strategy and Why Does My Business Need One? June 23, 2021. https://www.indeed.com/career-advice/career-development/organizational-strate-gy#:~:text=An%20organizational%20strategy%20is%20a,goals%20and%20develop%20strategic%20plans.

[14]. Nick Lioudis, The Inverse Relationship Between Interest Rates and Bond Prices, May 16, 2022.https://www.investopedia.com/ask/answers/why-interest-rates-have-inverse-relationship-bond-prices/.

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