Market prices of bonds fluctuate because the company's obligation (in the form of principal and interest payments) remains fixed.

Question

Quizplus · Accepted Answer

Market prices on bonds fluctuate similar to stocks. The reasoning behind this is that bond maturity values and periodic interest payments remain fixed, and because they compete with other investments, the amount for which a bond is issued must change to adjust to the market amount.

Market Prices of Bonds Fluctuate Because the Company's Obligation (In