Fill in the Blank QuestionFill in the blank question.If interest rates for new comparable bonds increase, the value of a bond will .

If interest rates for new comparable bonds increase, the value of a bond will decrease.

This inverse relationship between interest rates and bond values is a fundamental concept in finance. When new bonds are issued at higher interest rates, existing bonds with lower rates become less attractive to investors. Consequently, the price of these existing bonds must fall to offer a comparable yield to the newly issued bonds. The decrease in a bond's value reflects the market’s adjustment to maintain the bonds’ competitiveness given the new higher-yielding options. Thus, when interest rates rise, the market value of existing bonds typically declines, impacting investors who may wish to sell their bonds before maturity.