When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk. True or false?.

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When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk. True or false?.

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Tutorconsortium361id Tutorconsortium361id · Answer 1

True,When comparing a 10-year bond versus a 1-year bond, the 10-year bond has a much greater interest rate risk

What is bond?

A bond is a sort of financial security in which the issuer owes the bearer a debt and is obligated to repay the principle of the bond as well as interest over a specified period of time, depending on the terms. Interest is normally paid at regular intervals.

Bonds are one way for businesses to raise funds. A bond is a loan made between an investor and a firm. The investor agrees to contribute the corporation a particular sum of money for a set length of time. In exchange, the investor receives interest payments on a regular basis.

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