Changes in interest rates make investments in long-term bonds risky.
举一反三
- If interest rates are expected to rise in the future, the demand for long-term bonds _____ and the demand curve shifts to the _____.
- 【单选题】An upward-sloping term structure of interest rates indicates that: A. longer-term rates are higher than shorter-term rates B. investors should expect interest rates to decline in the future C. short and intermediate term rates are real rates while long term rates are nominal rates D. the Fed is expected to decrease rates in the near term E. the larger the investment in dollars, the higher the interest rate paid
- (I) Prices of longer-maturity bonds respond more dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for short-term bonds.
- (I) Prices of longer-maturity bonds respond less dramatically to changes in interest rates. (II) Prices and returns for long-term bonds are less volatile than those for shorter-term bonds.
- According to the market segmentation theory of the term structure,________ A: the interest rate for bonds of one maturity is determined by supply and demand for bonds of that maturity. B: bonds of one maturity are not substitutes for bonds of other maturities; therefore, interest rates on bonds of different maturities do not move together over time. C: investors' strong preference for short-term relative to long-term bonds explains why yield curves typically slope upward. D: all of the above. E: none of the above.