Question

Which of the following can be a reason for rising Bond Yield?

Q: Answer-Which of the following can be a reason for rising Bond Yield?

Most bonds pay a fixed interest rate that becomes more attractive if interest rates fall, driving up demand and the price of the bond. Conversely, if interest rates rise, investors will no longer prefer the lower fixed interest rate paid by a bond, resulting in a decline in its price. When the cost of borrowing money rises when interest rates rise, bond prices usually fall, and vice-versa. Further, Decrease in Bond prices causes the yield to increase.