Which of the following statements is true regarding investments in bonds?
A) Shorter maturity bonds generally return more than longer maturity bonds.
B) Treasury bonds generally return more than corporate bonds of the same maturity.
C) Longer maturity bonds generally return more than shorter maturity bonds.
D) Higher-rated bonds generally return more than lower-rated bonds.

Question

Quizplus · Accepted Answer

Longer maturity bonds generally return more than shorter maturity bonds because they typically carry higher interest rates to compensate for the increased risk of holding the bond over a longer period.

Which of the Following Statements Is True Regarding Investments in Bonds