Long-term bonds are
A)riskier than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds.
B)riskier than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds.
C)less risky than short-term bonds, and so interest rates on long-term bonds are usually lower than interest rates on short-term bonds.
D)less risky than short-term bonds, and so interest rates on long-term bonds are usually higher than interest rates on short-term bonds.

Question

Quizplus · Accepted Answer

Long-term bonds are considered riskier than short-term bonds because their longer duration makes them more susceptible to interest rate changes and other market risks. Therefore, to compensate for this increased risk, long-term bonds typically offer higher interest rates than short-term bonds.

Long-Term Bonds Are