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How can an increase in the interest rate make bonds more attractive and reduce their price?

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    $\begingroup$ Did you observe these effect in practice? Your question seems a bit unclear as it is. $\endgroup$
    – JoaoBotelho
    Jan 19, 2018 at 2:28

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The question as posed doesn't make sense to me. An increase in the market interest rate will reduce the price of current bond holdings precisely because they become less attractive since there are now more profitable alternatives in the market. Market forces will lower the price of the bonds in response to the increase in expected future coupon streams from these alternatives.

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