An investor desiring a bond investment that changes as little as possible as interest rates change should seek a bond with long duration rather than a strip.

Question

Quizplus · Accepted Answer

A bond with long duration is more sensitive to interest rate changes, while a strip, which is a zero-coupon bond, typically has a longer duration but is more sensitive to interest rate changes than a bond with shorter duration.

An Investor Desiring a Bond Investment That Changes as Little