I think you have posted the question in the wrong category it should be CFA l1
still here is the explanation –
Generally, for the same coupon rate, a longer-term bond has a greater percentage price change than a shorter-term bond when their market discount rates
change by the same amount…but the exceptions to the maturity effect are rare in practice. They occur only for lowcoupon (but not zero-coupon), long-term bonds trading at a discount (because if you see there is less amount of cash flow in ending years also the bond is trading at discount)
The maturity
effect always holds on zero-coupon bonds, as it does for bonds priced at par value or
at a premium above par value.
I think you have posted the question in the wrong category it should be CFA l1
still here is the explanation –
Generally, for the same coupon rate, a longer-term bond has a greater percentage price change than a shorter-term bond when their market discount rates
change by the same amount…but the exceptions to the maturity effect are rare in practice. They occur only for lowcoupon (but not zero-coupon), long-term bonds trading at a discount (because if you see there is less amount of cash flow in ending years also the bond is trading at discount)
The maturity
effect always holds on zero-coupon bonds, as it does for bonds priced at par value or
at a premium above par value.