Asked by joshy dallas on Jul 18, 2024
Verified
The shorter the term, the greater the interest rate risk.
Interest Rate Risk
The risk that changes in interest rates will adversely affect the value of an investment, particularly relevant for fixed-income securities.
- Comprehend the elements and mechanics behind the risk associated with interest rates for bonds.
Verified Answer
GD
GRIEGO DANIELLEJul 18, 2024
Final Answer :
False
Explanation :
Interest rate risk tends to increase with the length of the term; longer-term investments are generally more sensitive to interest rate changes than shorter-term investments.
Learning Objectives
- Comprehend the elements and mechanics behind the risk associated with interest rates for bonds.