Explain why there is a negative relationship between bond price and interest? ChatGPT The negative relationship between bond prices and interest rates is a fundamental concept in the field of finance known as the interest rate risk of bonds. This relationship is commonly referred to as the "interest rate effect." It can be understood by considering how changes in interest rates affect the attractiveness of existing bonds in the market. When interest rates in the market rise: New Bond Issuance: New bonds are issued with higher coupon rates to match the prevailing higher interest rates. These new bonds offer investors higher yields compared to older bonds with lower coupon rates. Higher Yields: As new bonds offer higher