An asset's interest rate risk ________ as the duration of the asset ________.
A)increases;decreases
B)decreases;decreases
C)decreases;increases
D)remains constant;increases

Name: An asset's interest rate risk ________ as the duration of the asset ________. A)increases;decreases B)decreases;decreases C)decreases;increases D)remains constant;increases
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Question

Quizplus · Accepted Answer

Interest rate risk decreases as the duration of the asset decreases because shorter-duration assets are less sensitive to changes in interest rates.

An Asset's Interest Rate Risk ________ as the Duration of the Asset