EFTA Document EFTA01393113

on long-term bonds or money market instruments, will generally cause prices of outstanding debt securities to increase. Conversely, rising rates across a particu- lar maturity spectrum will generally cause the prices of outstanding debt securities of that maturity to decline. EXAMPLE: A 30-year Treasury bond pays inter- est at a 12% coupon rate. The only time prior to matur- ity that investors will pay a price of 100 (that is, 100% of par value) for the bond is when the prevailing yield on