Illya Gerasymchuk
Entrepreneur / Engineer
regarding 1 year vs 30 year bond - imagine yields rise by 2%: ➖ the price of the bond maturing in 1 year declines by discounting those 2% from 1 year of cashflows ➖ a 30 year bond discounts for 30 years of cashflows
the longer the bond's time to maturity - the more compounding of unfavorable yields the bond's price must incorporate the more technical term is discounting, but compounding of unfavorable yields may help in bulging the mental model for what happens