When interest rates in the bond market go up

Name: When interest rates in the bond market go up
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Question

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When interest rates in the bond market go up, the price of existing bonds goes down. This is because investors will demand higher yields to compensate for the increased interest rates, and existing bonds with lower yields become less attractive. Therefore, to remain competitive, the price of existing bonds must decrease to increase their yield.

When Interest Rates in the Bond Market Go Up