As the Maturity or Duration of a Bond Increases, the Impact

question 36

True/False

As the maturity or duration of a bond increases, the impact on price of any changes in interest rates increases at a decreasing rate.

---

Definitions:

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, and vice versa.

Inverse Relationship

A relationship between two variables wherein one variable increases as the other decreases, and vice versa.

Economic Status

The social standing or class of an individual or group often measured by income, wealth, education, and occupation.

Political Preferences

The inclination or disposition of individuals towards specific political parties, ideologies, or policies.