Question

while bond prices fluctuate​

Answer 1

Answer:

Bond prices fluctuate on the open market in response to supply and demand for the bond. Furthermore, the price of a bond is determined by discounting the expected cash flow to the present using a discount rate.

Answer 2

As with any free-market economy, bond prices are affected by supply and demand. Bonds are issued initially par value, or $100. 1 In the secondary market, a bond's price can fluctuate. The most influential factors that affect a bond's price are yield, prevailing interest rates and the bond's rating.