1.   Since interest rates fluctuate from day to day, the prices of seasoned bonds also fluctuate.

2.   This price fluctuation requires that one measure the current yield on a seasoned bond.

3.   Now that rates have jumped, investors are no longer willing to pay dearly for the seasoned bonds in hopes of reducing their prepayment risk.

4.   Schultz said earlier this month he decided not to sell his seasoned bonds for that very reason.

5.   This happens because investors bid down the prices of seasoned bonds in favor of new issues sporting higher interest rates.

6.   Yet investors often pay higher prices for seasoned bonds on the expectation that bonds are less likely to be prepaid.