[NeoCaveman]

why they’re worth less the higher the yield..

Because the coupon is fixed.

Let's say you buy a bond for $1,000 with a 6% coupon. You recieve $60 a year.

Now lets say a year later new bonds (same issuer, same duration) pay out 8% or $80 a year. Well, no one will want to buy your $60 a year in income for $1,000 because they can get $80 in income for $1000.

Therefore your bond is worth less than it was a year ago. Now if you hold it to maturity you will still get your $1,000 but if you sell it early you need to do it at a price where that $60 in income equals an 8% yield (or about $750).

[lainie]

You can’t sell the $1,000 back to the seller (usg) right?