Answered

What are the benefits of a long-term bond over a short-term bond?

A. Long-term bonds have fewer risks than short-term bonds.
B. Long-term bonds have more risks associated with them and bring in lower returns for the initial investment.
C. While long-term bonds have more risks associated with them, they have the potential to bring in higher returns for the initial investment.
D. Long-term bonds always have a higher return for the investment.

Please select the best answer from the choices provided:
A, B, C, or D.



Answer :

GinnyAnswer

Final answer:

Long-term bonds have the potential for higher returns despite higher risks compared to short-term bonds.


Explanation:

The benefits of a long-term bond over a short-term bond lie in the potential for higher returns for the initial investment despite the higher associated risks. Long-term bonds offer investors the opportunity to gain a premium in the form of higher returns compared to short-term bonds.


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