NextPrevious

Bonds

The Basics

What is the connection between prevailing interest rates and a bond’s maturity?

Changes in prevailing interest rates may change a bond’s returns, but not in the same way for all bonds. If a bond is relatively long term regarding the date when it matures, its price may be more affected when compared with a bond with a relatively shorter maturity. Generally, bonds of longer duration and maturities will offer yields that help to compensate investors for this extra interest-rate risk.



Close

This is a web preview of the "The Handy Investing Answer Book" app. Many features only work on your mobile device. If you like what you see, we hope you will consider buying. Get the App