Does anyone know why debt security prices and interest rates are inversely related.?

Answer 1

you would think that debt security prices and interest rates should be positively related, because as interest rates go up your return on debt securities should also rise.

as i understand it, this isnt the case because debt securities often have fixed interest rates. so, if interest rates go up, investors would rather own newer securities at the higher rate than older securities at the lower rate. so debt securities and interest rates are inversely related