All else the same, if interest rates fall, the percentage price change for long-term bonds will be greater than for short-term bonds.

Question

Quizplus · Accepted Answer

Long-term bonds have a longer duration, which means they are more sensitive to changes in interest rates. Therefore, when interest rates fall, the percentage price increase of long-term bonds is generally greater than that of short-term bonds.

All Else the Same, If Interest Rates Fall, the Percentage