Question

If you hold a bond with the intent of holding it until maturity, do you lose return when the interest rates goes up?

Answer 1

If I am holding a bond till maturity, it will mean that I will be looking upon the opportunity gain of rising of interest in the market because when the interest rates will be rising, it will mean that I would have else earned with higher rate of interest with those other bonds, but if I am holding these bonds and if these bonds are having a lower coupon then the interest rates in the market then I will be losing out on my opportunity gain.

when the market rate of interest will be higher than the overall coupon rate which will be paid to me on these bonds, then it will be an opportunity loss for me because if I would have invested in some other bonds, I would have gained a higher amount of interest so it is not a direct loss but it is an opportunity loss. This will decrease the attractiveness of my bond.