The correct answer is B: False. This means that when interest rates change, the prices of short term bonds will be less than long term bonds.
Long-term bond holders are more vulnerable to interest rate risk than investors who own bonds with shorter maturities. As a result, long-term bonds will experience a higher shift in price if interest rates move by 1%, rising when rates are low and dropping when they are high. Interest rate risk is frequently not a major concern for people holding bonds till maturity, which is explained by their longer duration measure. Hedging tactics may be used by more experienced traders to lessen the impact of fluctuating interest rates on bond portfolios.
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