How much interest rates would have to rise, for a T-Bond to drop 50% in price?

Discussion in 'Financial Futures' started by crgarcia, Jul 23, 2009.

  1. I'm being told interest rates would not need to double, as the relationship is not linear.

    Please give me the formula and some explanation, please.
  2. Here's the formula:

    Just put the formula into Excel (hint: it already has functions for this) and you will be able to examine the relationship between yields and prices to your heart's content.