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Effect on bonds of changing interest rates

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Why are existing bonds affected by changing interest rates? can you please use example.

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The expert explains why existing bonds are affected by changing interest rates. An example is provided.

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Why are existing bonds affected by changing interest rates? Can you please use example.

Bond prices are inversely related to interest rates, so if the interest rates increase, the price of the bond will decrease and if the interest rates decrease, the price of the bond will increase.

The interest rate on a bond is set at the time it is issued. The 'coupon' of a bond is fixed at issue. This means that if the coupon rate is 6% and the face value is $ 1000 and the coupon payments are received annually, then this bond will give the investor a fixed $60 every year as coupon payments till the ...

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