A Bond with Short Maturity Has Less "Interest Rate Risk

question 22

True/False

A bond with short maturity has less "interest rate risk" than a bond with long maturity when all other features-coupon interest rate, par value, and interest payment frequency-are the same.

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Definitions:

Legal Object

A legal object in contractual terms refers to the subject matter of the contract that must be lawful and not against public policy.

Public Policy

Principles and standards considered being in the collective interests of the community, often guiding lawmaking and government actions.

Illegal

Refers to actions or activities that violate statutory law, regulations, or common law.

Voidable

A term used to describe a contract or transaction that, while valid, may be annulled by one of the parties to the contract.