If interest rates have risen since a bond was originally issued, then the bond's price will fall until the yield to maturity of the bond becomes

Question

Quizplus · Accepted Answer

When interest rates rise, the price of existing bonds falls to adjust the yield to maturity so it becomes equal to the new, higher interest rates. This makes the bond's yield competitive with new bonds issued at the current higher rates.

If Interest Rates Have Risen Since a Bond Was Originally