bonds, price sensitivity to a given change in interest rates is generally greater the longer before the bond matures.

Question

Quizplus · Accepted Answer

This is a fundamental concept in finance known as duration. The longer the time until a bond matures, the more its price will be affected by changes in interest rates. This is because there is more time for interest rates to fluctuate and impact the bond's future cash flows.

Bonds, Price Sensitivity to a Given Change in Interest Rates