Answer: When the demand for bonds INCREASES or the supply of bonds DECREASES, bond prices rise.
A bond is an evidence of a long-term debt, by which the borrower is obliged to pay interest and the principal at maturity, as specified on the face of the bond certificate. Bonds are available in two forms: registered bonds, and bearer bonds.
Bonds are often sold by banks and in this case, as a general rule in economics, when the demand of a commodity increase, the price of the commodity will increase. This is done to maximize profits as the demand for such commodity is high.
