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📉 Bond Yield and Duration: Why Bond Prices Fall When Interest Rates Rise

Explore why bond prices and market yields move in opposite directions, and how duration and convexity let investors estimate exactly how much a bond's price will change when interest rates shift.

Financial Models & Markets3DModerate60 FPS

The simulation renders a 3D price-yield curve for a customizable bond, showing how its price bows along a convex surface as market yield changes, and compares the actual repriced value against the straight-line duration estimate.

🔬 What It Demonstrates

🎮 How to Use

Adjust sliders for face value, coupon rate, maturity, and market yield to watch the bond reprice in real time, and toggle the duration-only versus duration-plus-convexity estimate lines to see how closely each tracks the true price.

💡 Did You Know?

During 2022, when central banks raised interest rates at the fastest pace in decades, long-duration government bond funds lost more value in months than they had gained in the previous several years of coupon income combined.

⚙ Under the hood

Explore why bond prices and market yields move in opposite directions, and how duration and convexity let investors estimate exactly how much a bond's price will change when interest rates shift.

financebondsdurationconvexityinterest ratesfixed incomepresent valueinvesting

3D · Three.js / WebGL renderer · 60 FPS target · runs fully client-side, no install