Question: State whether this statement is true or false and explain your answer: The values of outstanding bonds change whenever the going rate of interest changes.

State whether this statement is true or false and explain your answer: "The values of outstanding bonds change whenever the going rate of interest changes. In general, short

-

term interest rates are more volatile than long

-

term rates, so short

-

term bond prices are more sensitive to interest rate changes than are long

-

term bond prices."

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