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A Study on Bond Price Sensitivity to Interest Rate Movements with Reference to Shiva Cooperative Credit Bank, Haveri
Subject area: Management and Commerce · Area of research: Haveri
DOI: https://doi.org/10.64388/IREV10I1-1719920
Abstract
This study examines the sensitivity of bond prices to interest rate movements, with special reference to Shiva Cooperative Credit Bank, Haveri. Bonds are a key investment instrument used by banks and financial institutions to generate stable returns, yet their market value is directly affected by changes in prevailing interest rates. The research combines primary data, collected through a structured questionnaire administered to 50 respondents using convenience sampling, with secondary data drawn from books, journals, RBI reports, and financial websites. Percentage analysis, frequency distribution, and Pearson correlation were used to examine the relationship between bond yield to maturity and bond prices for a sample of seven bonds. The correlation coefficient obtained was 0.546, indicating a moderate positive relationship; however, the associated t-value (1.46) was below the critical value (2.571) at the 5 percent significance level, so the null hypothesis could not be rejected for this specific sample. Despite this statistical result, respondent perceptions and duration-based analysis confirmed the well-established inverse relationship between interest rates and bond prices, particularly for longer-maturity and higher-duration bonds. The study concludes that effective monitoring of interest rate movements and sound risk management practices are essential for cooperative banks seeking to protect the value of their bond portfolios.
How to cite this paper
@article{1719920,
author = {Swati Chandrashekar Hubballi, Prof. Saroja S, Prof. Vanisha D Patel},
title = {A Study on Bond Price Sensitivity to Interest Rate Movements with Reference to Shiva Cooperative Credit Bank, Haveri},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {1},
pages = {1991-1994},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1719920.pdf},
abstract = {This study examines the sensitivity of bond prices to interest rate movements, with special reference to Shiva Cooperative Credit Bank, Haveri. Bonds are a key investment instrument used by banks and financial institutions to generate stable returns, yet their market value is directly affected by changes in prevailing interest rates. The research combines primary data, collected through a structured questionnaire administered to 50 respondents using convenience sampling, with secondary data drawn from books, journals, RBI reports, and financial websites. Percentage analysis, frequency distribution, and Pearson correlation were used to examine the relationship between bond yield to maturity and bond prices for a sample of seven bonds. The correlation coefficient obtained was 0.546, indicating a moderate positive relationship; however, the associated t-value (1.46) was below the critical value (2.571) at the 5 percent significance level, so the null hypothesis could not be rejected for this specific sample. Despite this statistical result, respondent perceptions and duration-based analysis confirmed the well-established inverse relationship between interest rates and bond prices, particularly for longer-maturity and higher-duration bonds. The study concludes that effective monitoring of interest rate movements and sound risk management practices are essential for cooperative banks seeking to protect the value of their bond portfolios.},
month = {July},
doi = {https://doi.org/10.64388/IREV10I1-1719920}
}