why are bond prices inversely related to interest rates 
a bond that pays a fixed coupon will see its price vary inversely with interest rates this is because receiving a fixed interest rate of say 5 is not very attractive if prevailing interest rates are 6 and become even less desirable if rates can earn 7 in order for that bond paying 5 to become equivalent to a new bond paying 7 it must trade at a discounted price likewise if interest rates drop to 4 or 3 that 5 coupon becomes quite attractive and so that bond will trade at a premium to newly issued bonds that offer a lower coupon 