A security with higher risk will have a higher expected return. A bonds risk level is reflected in its yield, but understanding the different risks involved When investing in bonds is important. The curves on the following graph show the prices of two 10% annual coupon borids at various interest rates. Based on the greph, which of the following statements is true? Neither bond has any interest rate risk. The 10 -year bond has more interest rate risk. The 1 -year bond has more interest rate risk. Both bonds have equal interest rate risk: Frank barkwe is retiring soon, so he's concemed about his investments providing him with a steady inceme every year. Hes aware that interest rotes , the potential earnings power of the cash flow from his investments will increase. in particular, he is cancerned that a decline in interest rotes molit leod to annual income from Wis imestments. What kind of risk is Frank most concerned about protecting against? Reinvestment risk Interest rote risk Answer the foliowing guestion based on your understanding of interest rate risk and reirivestment risk. True or False: Assuming all else is equal, the shorter a bond's maturity, the more its price will change in response to a given change in interest rates. Paltse. True