(2) Why are long-term bonds more susceptible to interest rate risk than short-term bonds? Provide examples to explain. [10 Marks]

Fundamentals of Financial Management, Concise Edition (MindTap Course List)
9th Edition
ISBN:9781305635937
Author:Eugene F. Brigham, Joel F. Houston
Publisher:Eugene F. Brigham, Joel F. Houston
Chapter7: Bonds And Their Valuation
Section: Chapter Questions
Problem 3DQ: Looking at the bond issue selected, why are the current yield and yield to maturity numbers...
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(2) Why are long-term bonds more susceptible to interest rate risk than short-term bonds?
Provide examples to explain.
[10 Marks]
Transcribed Image Text:(2) Why are long-term bonds more susceptible to interest rate risk than short-term bonds? Provide examples to explain. [10 Marks]
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