intressimäärfekt

Intressimäärfekt refers to the impact of changes in interest rates on the value of financial assets, particularly fixed-income securities like bonds. When interest rates rise, newly issued bonds offer higher yields, making existing bonds with lower coupon rates less attractive. Consequently, the market price of these older bonds falls to compensate investors for the lower interest payments. Conversely, when interest rates fall, existing bonds with higher coupon rates become more valuable as they offer a better return than new issues. This causes their market price to rise.

The magnitude of this effect is influenced by several factors, most notably the bond's maturity and its coupon rate. Longer-maturity bonds are more sensitive to interest rate changes because the investor's capital is tied up for a longer period, making them more exposed to shifts in prevailing rates. Bonds with lower coupon rates also experience a larger price fluctuation in response to interest rate changes compared to those with higher coupon rates. This is because a larger proportion of their total return comes from the principal repayment at maturity, which is discounted more heavily when interest rates rise. Understanding the intressimäärfekt is crucial for investors managing bond portfolios and for financial institutions assessing risk.