8-29 For a given change in interest rates,the change in price for each additional year of maturity of a fixed-rate asset is smaller as the maturity increases.

Question

Quizplus · Accepted Answer

This statement is true. This is because the longer the maturity of a fixed-rate asset, the more its cash flows will be affected by changes in interest rates over time, and thus its price will be less sensitive to changes in interest rates compared to assets with shorter maturities.

8-29 for a Given Change in Interest Rates,the Change in Price