Is a bond’s price dependent on yield or is it the other way?

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. Essentially, a bond’s yield is the present value of its cash flows, which are equal to the principal amount plus all the remaining coupons.

What factors affect bond prices?

3 factors that affect bond prices

• Interest rates. In general, when interest rates rise, bond. They use the money to run their operations. …
• Inflation. In general, when inflation. This means a dollar can buy fewer goods over time. …
• Credit ratings. Credit rating.