Short-term interest rates are more volatile than long-term rates. Despite this, the rates of return of long-term

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Short-term interest rates are more volatile than long-term rates. Despite this, the rates of return of long-term bonds are more volatile than return on short-term securities. How can these two empirical observations be reconciled?

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Corporate Finance A Focused Approach

ISBN: 978-1439078082

4th Edition

Authors: Michael C. Ehrhardt , Eugene F. Brigham

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Posted Date: Feb 15, 2019 09:11 AM

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Short-term interest rates are more volatile than long-term rates. Despite this, the rates of return of long-term

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Reconciliation of following observations Observation 1 Shortterm interest rates are more volatil... View the full answer

Corporate Finance A Focused Approach

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