Bonds Flashcards
1
Q
How is the maturity of a bond effected by interest rates?
A
The longer the maturity of a bond, the more its price will decline when interest rates go up.
2
Q
Which react more quickest to interest rate changes?
Short term bonds or
Long term bonds?
A
Short-term bonds
3
Q
Which react greatest to long-term interest rate changes?
Short-term bonds or
Long-term bonds
A
Long-term bonds
