The price sensitivity of a bond to a given change in interest rates is generally lower the longer the bond's remaining maturity because short term rates are more volatile than long term rates.
This statement is false.
The Price sensitivity of a bond with respect to interest rate is called maturity and is generally lower with lower maturity bonds. Duration can be thought of as a weighted avarage of time at which the bond holder receive the payment. So duration increases with the maturity of a bond and i like a payback period.
I hope this makes sense
Feel free to ask anything in comments
Also press the like button
Took a lot of efforts
Thanks & Regards
Get Answers For Free
Most questions answered within 1 hours.