In: Finance
Sam holds a $1 million bond portfolio with an average maturity of 9 years, whereas Walt holds a $1 million bond portfolio with an average maturity of 3 years. If interest rates increase substantially, Sam’s portfolio will experience the:
larger decline in value of the two portfolios. |
||
larger increase in value of the two portfolios. |
||
smaller decline in value of the two portfolios. |
||
smaller increase in value of the two portfolios. |