There is an inverse relationship between the bond prices and market interest rates.

Question

Quizplus · Accepted Answer

When market interest rates increase, bond prices decrease and vice versa. This is because as interest rates rise, newer bonds with higher yields become available, making older bonds with lower yields less attractive to investors. Therefore, the price of older bonds will decrease in order to align with the new, higher interest rates.

There Is an Inverse Relationship Between the Bond Prices and Market