Are long-term bonds more sensitive to interest rate changes than short-term bonds?
On One Hand: Long-Term BondsThose who hold long-term bonds can see many interest rate changes during the term of the bond. As interest rates rise, the value of a long-term bond decreases.On the Other: Short-Term BondsShort-term bonds are not as susceptible to interest rate changes since there are fewer interest rate changes during the term of the bond. Short-term bonds can be held to maturity without as much risk as long-term bonds.Bottom LineInterest rate changes affect long-term bonds more than short-term bonds.
