Long-Term Bond Prices Are More Volatile Than Short-Term Bond Prices

question 131

True/False

Long-term bond prices are more volatile than short-term bond prices, given an equal percentage change in the interest rate.
The longer the remaining time, the greater the impact of a change in market rates of interest affecting the price.

Identify the factors that cause shifts in demand and supply.

Analyze the impact of technological advances on supply.

Determine the effects of taxes on market equilibrium.

Understand the concept of substitutes and how changes in prices affect demand.

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Definitions:

Reagan Doctrine

A strategy implemented by the U.S. during the presidency of Ronald Reagan, aimed at diminishing the influence of the Soviet Union globally by supporting anti-communist resistance movements.

Anticommunist Forces

Individuals or groups that oppose communism, often advocating for or engaging in political or military action against communist movements or governments.

Soviet-backed Governments

Soviet-backed governments were administrations in various countries during the Cold War that received political, military, and economic support from the Soviet Union to establish or maintain communist regimes.

Economic Necessity

A situation where financial considerations compel a particular course of action, indicating that certain decisions are driven by economic rather than preferential factors.