Question: Select the true statement about interest rate risk. Shorter - term bonds are more sensitive to interest rate risk than longer - term bonds. It
Select the true statement about interest rate risk.
Shorterterm bonds are more sensitive to interest rate risk than longerterm bonds.
It stems from the fact that bond prices and market interest rates are inversely correlated.
Interest rate risk is particularly problematic for investors who do not wish to sell their bonds.
It is the risk that a bond's coupon payment will fall if market interest rates fall.
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