Explain why bond prices fall when inflation increases.

Determination of Interest Rates Prior to beginning work on this assignment, read Hubbard and O’Brien’s (2017) Chapters 3 and 4. Choice Financial is a financial services firm based in San Diego, California. In early 2018, Tom Jones, a financial analyst for the firm, predicted that the inflation rate would go up from 1.5% in 2018 to 6% in 2020. He advised investors not to buy bonds because their prices would fall as inflation increased.Explain why bond prices fall when inflation increases.Analyze the relationship between the price of bonds and interest rates.Appraise how interest rates are determined using the following models and whether the different models produce different results in determination of interest rates:Demand and SupplyBond MarketMoney MarketEvaluate how each of the following affects interest rates and the price of bonds:Yield to MaturityBond YieldsRiskThe Determination of Interest Rates paperMust be three to four double-spaced pages in length (not including title and references pages) and formatted according to APA style as outlined in the Ashford Writing Center (Links to an external site.)Links to an external site..Must include a separate title page with the following:Title of paperStudent’s nameCourse name and numberInstructor’s nameDate submittedMust use at least three scholarly, peer-reviewed, and/or other credible sources in addition to the course text.Must document all sources in APA style as outlined in the Ashford Writing Center.Must include a separate references page that is formatted according to APA style as outlined in the Ashford Writing Center.