The longer the time to maturity, the more sensitive a bond's price to changes in market interest rates.

Name: The longer the time to maturity, the more sensitive a bond's price to changes in market interest rates.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

This statement is true. The longer the time to maturity, the more time the bond has to be affected by changes in market interest rates, making it more sensitive to those changes. This is known as duration risk.

The Longer the Time to Maturity, the More Sensitive a Bond's