A Bond That Had a 20-Year Original Maturity with 1

question 22

True/False

A bond that had a 20-year original maturity with 1 year left to maturity has more price risk than a 10-year original maturity bond with 1 year left to maturity.(Assume that the bonds have equal default risk and equal coupon rates,and they cannot be called. )

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Definitions:

Raises Unemployment

An action or event that leads to an increase in the number of unemployed individuals.

Frictional Unemployment

A form of unemployment that occurs when people are between jobs or are in the process of finding new jobs, usually reflecting short-term movement within the labor market.

Natural Rate

Often referred to as the natural rate of unemployment, indicating the level of unemployment expected in an economy without short-term cyclical fluctuations.

Tastes and Skills

Individual preferences and abilities that influence consumer behavior and labor market dynamics, affecting demand for goods and employment opportunities.