What happens to the price of a bond when interest rates rise?

When interest rates rise, the price of a bond generally falls. This is because the interest rate on a bond represents the cost of borrowing for the issuer of the bond. When interest rates rise, new bonds are issued with higher interest rates, which means that existing bonds with lower interest rates become less attractive to investors. As a result, the price of the bond must fall to make it more attractive to investors. Conversely, when interest rates fall, the price of a bond generally rises, as investors are willing to pay a higher price to lock in a higher interest rate.