Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term bonds are less volatile than short-term bonds. How do you reconcile these observations?
Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term bonds are less volatile than short-term bonds. How do you reconcile these observations?
Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)
7th Edition
ISBN:9780357033609
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter12: Investing In Stocks And Bonds
Section: Chapter Questions
Problem 6LO
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Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term bonds are less volatile than short-term bonds. How do you reconcile these observations?
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