Because short-term interest rates are much more volatile than long-term rates, an investor would, in the real world, be subject to much more interest rate price risk if he or she purchased a 30-day bond than if he or she bought a 30-year bond.

Question

Quizplus · Accepted Answer

Long-term bonds are generally more sensitive to interest rate changes than short-term bonds, meaning an investor in a 30-year bond would typically face more interest rate price risk than an investor in a 30-day bond.

Because Short-Term Interest Rates Are Much More Volatile Than Long-Term