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    Why market price changes with interest rate

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    The market price of outstanding issues often varies from par (face value) because ______

    the maturity data has changed, the coupon rate has changed, the market rate of interest has changed, or old bonds sell for less than new bonds

    I believe - the market rate of interest has changed is the answer - please advise answer & why - thanks!

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    Solution Preview

    Yes the answer is that the market rate of interest has changed.
    The market price of the bond reflects the required rate of return ...

    Solution Summary

    The solution explains why the market price of outstanding securties changes when interest rates change