Answered: Price of short-term bond are less…

Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term bonds are less volatile than short-term bonds. How do you reconcile these observations?

Pfin (with Mindtap, 1 Term Printed Access Card) (mindtap Course List)

7th Edition

ISBN:9780357033609

Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk

Chapter12: Investing In Stocks And Bonds

Section: Chapter Questions

Problem 6LO

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Price of short-term bond are less volatile than long-term bonds. But yield to maturity of long-term bonds are less volatile than short-term bonds. How do you reconcile these observations?

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