What is the nature or type of that risk

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Reference no: EM13300949

A necessary consequence of the pure expectations theory is that investors are indifferent with respect to differences in the maturities of bonds in the sense that they do not view long-term bonds as being riskier than short-term bonds.

Do you agree that long-term bonds are not riskier than short-term bonds (assume bonds by the same issuer)? If there is a difference in risk, what is the nature/type of that risk?

Reference no: EM13300949

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