Frequently Asked Questions

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Bond Pricing

Why does the Yield of a Bond fluctuate?


The yield is the effective interest rate that one earns from bonds. It is a function of coupon and market price. As the market price of Bonds fluctuates due to varying macroeconomic and sector-specific/ issuer-specific factors, so the Bond Yields also change with time. However, it is to be kept in mind that once an investor has purchased a Bond at a certain price, the investor’s yield remains fixed till maturity of the Bond.