You could split your dollars among bonds with different yields and different maturity dates. You might do this if you think rates might go up, and you wish to avoid huge price swings that are typical of long-term bonds (in other words, you want to avoid "price risk.") Of course, you could be wrong, and rates could drop instead of rise. The chart below shows the amounts you invest in Bond A, B and C. For instance, you buy 20 of ''Bond A,'' and each of them has a YTM of 5.4% and matures in 3 years. 6.9 6.8 YTM 6.6 (%) 6.3 5.9 5.4 4.8 4.1 1 2 3 4 5 ..... 18 19 20 Years Bond A Bond B Bond C Bond T 20 18 16 <-- Number of Bonds Assume the face value of all bonds is $ 1,000. Compute your total dollar outlay from purchasing the 54 bonds that make up your bond ladder