6 lines
417 B
Markdown
6 lines
417 B
Markdown
**Longer term = more price volatility.** The further away the maturity, the more sensitive the bond is to interest rate changes.
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The intuition: with a 20-year bond, you're locked into that coupon for much longer, so a change in rates hurts (or helps) you more. A 5-year bond matures soon anyway, so the market impact is smaller.
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Remember the rule: **same coupon, different terms → longer term is more volatile.**
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