Between the two identical bonds having different maturity periods, the price of the ______ bond will change less than that of ______ bond.
Ashort-term; long-term
Blong-term; short-term
CNone of the given options
Dlower-coupon; higher-coupon
Correct answer
A. short-term; long-term
Explanation
The longer the time to maturity, all else being equal, increases duration. Higher duration = higher sensitivity to interest rate changes. Interest rates higher = price lower.