Definition for : Volatility - bonds

The Volatility of Bonds is mainly due to the Interest rate risk, affecting almost solely fixed-rate instruments. The Value of a fixed-rate instrument is actually not fixed. It varies inversely to Market rates. This sensitivity is stronger when the nominal interest rate of the Bond and Market interest rates are low.
(See Chapter 21 Other debt products of the Vernimmen)
To know more about it, look at what we have already written on this subject