Question
As the maturity of a bond increases, interest rate risk Blank______.
Multiple choice question.
decreases at an increasing rate
increases at an increasing rate
increases at a decreasing rate
remains constant
Multiple choice question.
decreases at an increasing rate
increases at an increasing rate
increases at a decreasing rate
remains constant
Answers
GPT-4o mini
As the maturity of a bond increases, interest rate risk **increases at an increasing rate**.
Longer maturity bonds are more sensitive to interest rate changes, leading to greater fluctuations in their prices as rates change.
Longer maturity bonds are more sensitive to interest rate changes, leading to greater fluctuations in their prices as rates change.