Because Short-Term Interest Rates Are Much More Volatile Than Long-Term

question 13

True/False

Because short-term interest rates are much more volatile than long-term rates,you would,in the real world,generally be subject to much more price risk if you purchased a 30-day bond than if you bought a 30-year bond.

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Definitions:

Attitude Change

The process by which an individual's general feelings, beliefs, and behaviors towards a person, object, or event are altered.

Cognitive Dissonance

The psychological discomfort experienced when holding two or more contradictory beliefs, values, or ideas simultaneously.

Stockbroker

A professional who buys and sells stocks and other securities for clients in exchange for a fee or commission.

Behavioral Aggregation

The process of combining multiple instances of behavior over time to give a more stable assessment of an individual's typical behavior.