All other things the same, longer maturity bonds have greater relative price volatility than shorter maturity bonds.

Question

Quizplus · Accepted Answer

Longer maturity bonds are exposed to more interest rate risk, which increases their price volatility compared to shorter maturity bonds. When interest rates rise, the value of longer maturity bonds decreases more compared to shorter maturity bonds. Similarly, when interest rates decrease, the value of longer maturity bonds will increase more compared to shorter maturity bonds.

All Other Things the Same, Longer Maturity Bonds Have Greater