{"id":43324,"date":"2024-04-15T21:27:49","date_gmt":"2024-04-15T21:27:49","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=43324"},"modified":"2024-04-15T21:27:49","modified_gmt":"2024-04-15T21:27:49","slug":"in-capital-budgeting-term-of-bond-which-has-great-sensitivity-to-interest-rates-is","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/in-capital-budgeting-term-of-bond-which-has-great-sensitivity-to-interest-rates-is\/","title":{"rendered":"In capital budgeting, term of bond which has great sensitivity to interest rates is"},"content":{"rendered":"

[amp_mcq option1=”long-term bonds” option2=”short-term bonds” option3=”internal term bonds” option4=”external term bonds” correct=”option1″]<\/p>\n

The correct answer is A. long-term bonds.<\/p>\n

Long-term bonds are more sensitive to interest rates than short-term bonds because the longer the maturity of a bond, the greater the effect of changes in interest rates on its price. This is because the longer the maturity, the more time there is for interest rates to change and affect the bond’s value.<\/p>\n

Short-term bonds, on the other hand, are less sensitive to interest rates because they have a shorter maturity. This means that there is less time for interest rates to change and affect the bond’s value.<\/p>\n

Internal term bonds and external term bonds are not terms used in finance.<\/p>\n","protected":false},"excerpt":{"rendered":"

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