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

question 34

True/False

A bond that had a 20-year original maturity with 1 year left to maturity has more interest rate 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:

External Pull

Influences or factors outside an individual that draw or entice them towards certain decisions, actions, or behaviors.

Incentive

Something that motivates or encourages someone to do something or increases the likelihood of a behavior.

Drive-Reduction Theory

A theory that explains motivation as being rooted in the desire to reduce uncomfortable internal states.

Internal Tension

A psychological state characterized by a conflict of emotions or impulses within an individual, often leading to stress or mental discomfort.