If you expect interest rates to rise over time, you should consider investing in bonds with longer maturities.

Question

Quizplus · Accepted Answer

Investing in bonds with longer maturities when interest rates are expected to rise can lead to lower returns, as the value of existing bonds typically decreases when new bonds are issued at higher rates. Shorter-term bonds are less affected by interest rate changes and allow investors to reinvest at higher rates sooner.

If You Expect Interest Rates to Rise Over Time, You