Although the maturity value of a bond is fixed, changes in current interest rates will:

Question

Quizplus · Accepted Answer

Changes in current interest rates will affect the bond's yield, which in turn will affect the market price of the bond. As the yield goes up, the market price of the bond will go down, and vice versa. Additionally, since the coupon payment is a fixed percentage of the bond's par value, changes in interest rates will not affect the amount of the semiannual coupon payment.

Although the Maturity Value of a Bond Is Fixed, Changes