How does the maturity period impact the Interest Rate Risk and the Coupon Rates?

A bond’s maturity is the date to calculate and repay the bond’s face value to the investor, like after 6 months, 5 years, etc. The maturity period also affects interest rate risk. A bond with a longer maturity period generally has a higher interest rate risk because the changing interest rates can negatively affect the bond’s price.

  • Longer maturity means higher interest rate risk
  • Shorter maturity means lower interest rate risk
Featured Bonds

    Powered by