Everything else equal, the ________ the maturity of a bond and the ________ the coupon, the greater the sensitivity of the bond's price to interest rate changes.

Question

Quizplus · Accepted Answer

Bonds with longer maturities and lower coupons are more sensitive to interest rate changes because they have longer durations, meaning it takes more time for the investor to receive the bond's payments, making them more susceptible to interest rate fluctuations.

Everything Else Equal, the ________ the Maturity of a Bond