I was wondering why there is interest rate risk on a bond that a financial services firm has sold, besides default risk on the bond? As far as I know interest rate risk means the risk that is caused by the change of interest rate. However the interest rate of a bond is specified by the issuer when it is issued and fixed ever since , so how the change of interest rate in the future will cause risk? Will this interest rate risk affect the issuer of the bond, or the buyer of the bond, or both?
Thanks and regards!