During periods when the yield curve is normal, as market interest rates change, which is TRUE?

During periods when the yield curve is normal, as market interest rates change, which is TRUE?



A) There is no relationship between the relative price movements of short-term and long-term bonds.

B) Long-term bond prices move more sharply.

C) Both short-term and long-term bond prices move equally.

D) Short-term bond prices move more sharply.



Answer: B) Long-term bond prices move more sharply.


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