SIE Exam Question 775: Answer and Explanation

Question: 775

____ The shorter a bond's term to maturity, the __________ its potential for relative price fluctuation.

• A. More
• B. Less
• C.
• D.

Correct Answer: B

Explanation:

The shorter a bond's term to maturity, the less its potential for relative price fluctuation. Long-term bonds have more price volatility.