Maturity risk exists because:

A) long-term bond prices fluctuate more than short-term bond prices when interest rates change.
B) short-term bond prices are stable.
C) bond prices fluctuate with yield rates in bond markets.
D) short-term bonds are less risky.

Maturity Risk

The risk associated with the length of time until the face value of an investment is returned, affecting its susceptibility to interest rate changes.

Long-Term Bond

A bond with a maturity date extending beyond 10 years, offering higher yields to compensate for the increased risk associated with the longer duration.