# Math

posted by
**Casey** on
.

The values of outstanding bonds change whenever the going rate of interest changes. In

general, short-term interest rates are more volatile than long-term interest rates. Therefore,

short-term bond prices are more sensitive to interest rate changes than are long-term bond

prices. Is that statement true or false? Explain. (Hint: Make up a “reasonable” example

based on a 1-year and a 20-year bond to help answer the question.)