To sell an old bond when interest rates have ________,the holder will have to ________ the price of the bond until the yield to the buyer is the same as the market rate.

Question

Quizplus · Accepted Answer

When interest rates rise, the price of existing bonds (which have lower interest rates compared to the new market rate) must be lowered to make their yield (interest payment relative to the bond's price) attractive to buyers, aligning it with the current higher market rates.

To Sell an Old Bond When Interest Rates Have ________,The