Investor BulletIn Interest rate risk — When Interest rates ...

When Interest rates Go up, Prices of Fixed-rate Bonds Fall. ... and a year later market interest rates fall to 2%. The bond will still pay a 3% coupon rate, making it more valuable than new bonds paying just a 2% coupon rate. If you sell the 3% bond before it matures, you will probably find that its price is higher than it was a year ................
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