Series 50: Maturity

Taken from our Series 50 Online Guide

Maturity

The price volatility of a municipal bond tends to increase in direct proportion to its maturity. When interest rates rise, bonds with longer maturities decline more in price than bonds with shorter maturities. Not only do shorter maturities minimize interest rate risk for investors, but they also minimize default risk. As a result, municipal bonds with shorter maturities tend to be more marketable. This is especially true of revenue bonds.

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