For a specific change in the yield to maturity
A)the shorter the time until a bond matures, the greater will be the change in its price.
B)the longer the time until a bond matures, the greater will be the change in its price.
C)the longer the time until a bond matures, the greater will be the change in its par value.
D)the shorter the time until a bond matures, the greater will be the change in its coupon rate.

Question

Quizplus · Accepted Answer

The longer the time until a bond matures, the more sensitive its price is to changes in yield to maturity. This is because there are more future cash flows (coupon payments and the final principal repayment) that are discounted at the new yield, leading to a greater change in present value or price.

For a Specific Change in the Yield to Maturity