Well, Jen, I can answer the first question.
Bond prices and intrest rates are inversely proportional. (Remember "buying" a bond is the same as you lending an entity money for a specified term. The yield is your intrest.)
When either of them change, the other must go in the opposite direction in order to maintain a zero sum at the moment of the change.
For example let's say you purchase a $1000 bond at 10%. After one year, your investment is worth $1100. Now considder a month later someone else purchases the same bond, only the share price is now $900. In order for both investments to have relative value, the intrest rate must go up (it's the same bond remember).
Conversely if the intrest rate goes down, the share price will rise. If you wait and buy, you will be buying a depreciated investment. For short term, you would be better served buying now and take advantage of the price difference. If looking for the longer term, if you expect the intrest rate to go back up, you would be better served buying the higher premium after the intrest rate dropped. For when the intrest rate climes again, you will be earning intrest on a higher premium.
Ex the bond is now $1000 at 10%. After the rate change it is say ... $1100 but only 9% return. When the rate returns to 10% you will be earning 10% on $1100 instead of only $1000.
It all depends on your investment time frame and wether you are bearish or bullish about the intrest rate.
You would be served very well checking out
The Mottly Fool. They are a dedcated investors education site. They would be better able to describe bonds and currency markets much better than I.
[ 05-19-2004, 10:52 PM: Message edited by: Night Stalker ]