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Sagot :
When all else is equal, long-term bonds often carry more risk than short-term bonds, which results in higher interest rates. The ideal choice is A
How risky are long-term bonds compared to short-term bonds?
For two key reasons, long-term bonds are more prone to interest rate risk than short-term bonds: There is a greater possibility that interest rates will rise over a longer period of time (and hence have a negative impact on the market price of a bond).
Why are bonds with longer terms riskier than those with shorter terms?
Bonds with long maturities and low coupons sometimes have the longest durations. These bonds are more erratic and prone to fluctuations in market interest rates in an environment where rates are fluctuating. however, bonds have a sooner maturity date
To know more about short term bond visit:
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