All Else Equal,which Bond's Price Is More Affected by a Change

question 26

Essay

All else equal,which bond's price is more affected by a change in interest rates,a short-term bond or a longer-term bond? Why?

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Definitions:

Economics

The social science that deals with the production, distribution, and consumption of goods and services, and the theory and management of economies or economic systems.

Psychology

The scientific study of the human mind and its functions, especially those affecting behavior in a given context.

Yielding Strategy

A negotiation tactic where one party gives in to the demands or viewpoints of the other to reach an agreement or resolve a conflict.

Attain Outcomes

Attaining outcomes in negotiations involves achieving desired results or objectives that meet the interests or needs of the parties involved.