Comparing long-term bonds with short-term bonds,long-term bonds are ________ volatile and therefore experience ________ price change than short-term bonds for the same interest rate shift.
A)less; less
B)less; more
C)more; more
D)more; less
E)more; the same

Question

Quizplus · Accepted Answer

Long-term bonds are more volatile and experience more price change than short-term bonds for the same interest rate shift because they have a longer duration, which measures sensitivity to interest rate changes.

Comparing Long-Term Bonds with Short-Term Bonds,long-Term Bonds Are ________ Volatile