A change in market conditions causes the market price of a bond to change because of changes in the bond's:

Question

Quizplus · Accepted Answer

The yield to maturity of a bond is the total return anticipated on a bond if the bond is held until it matures. As market conditions change, investors' required rates of return also change, which affects the yield to maturity of a bond. Therefore, a change in market conditions causes the market price of a bond to change because of changes in its yield to maturity.

A Change in Market Conditions Causes the Market Price of a Bond