Fixed Income
Interest-Rate Sensitivity
Definition
What is Interest-Rate Sensitivity?
The degree to which an investmentAn asset or commitment of money made with the expectation of future income, growth, or both.'s price responds to changes in market interest rates.
Example in practice
How This Looks in Practice
Long-duration bonds have greater interest-rate sensitivity.
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Related Terms
Fixed Income
Bond
A debt security through which an investor lends money to an issuer in return for promised payments.
Fixed IncomeIssuer
The government, company, or organisation that creates and sells a security.
Fixed IncomeFace Value
The principal amount stated on a bond and usually repaid at maturity.
Money MarketsTreasury Bill
A short-term government debt instrument usually issued at a discount and repaid at face value.