As interest rates, and consequently investors' required rates of return, change over time, the [blank] of outstanding bonds will also change.

Question

Quizplus · Accepted Answer

The price of outstanding bonds will change as interest rates and required rates of return change. This is because the bond's value is based on the present value of its future cash flows, and higher interest rates decrease the present value of these cash flows, resulting in a lower bond price.

As Interest Rates, and Consequently Investors' Required Rates of Return