The Market Rate for Bonds Is Generally Higher When the Time

question 209

True/False

The market rate for bonds is generally higher when the time period to maturity is longer due to the risk of adverse events occurring over the time period.

---

Definitions:

Market Equilibrium

The state in which market supply and demand balance each other, resulting in stable prices.

Producer Surplus

The difference between the amount a producer is willing to accept for a product versus what they actually receive.

Equilibrium Price

The price at which the quantity of a good demanded by consumers equals the quantity supplied by producers.

Market Equilibrium

A situation in a market where the quantity demanded by consumers equals the quantity supplied by producers, leading to a stable price for the product or service.