If you hold a bond at a time when the market interest rate is increasing,you will find that the bond's value will _____

Question

Quizplus · Accepted Answer

When market interest rates increase, newly issued bonds will offer higher yields, resulting in less demand for the existing bond you hold. To compensate for the lower demand, you will have to sell your bond for a lower price, decreasing its value. Therefore, holding a bond at a time when market interest rates are increasing will decrease its value.

If You Hold a Bond at a Time When the Market