Long-term bonds have greater potential for capital gains than short-term bonds.

Question

Quizplus · Accepted Answer

Long-term bonds have greater potential for price appreciation due to the longer maturity period and higher interest rate risk, which means that their prices tend to be more volatile than short-term bonds. However, this potential for capital gains also comes with greater risk and uncertainty, as interest rate changes and economic factors can impact bond prices over a longer period of time.

Long-Term Bonds Have Greater Potential for Capital Gains Than Short-Term