The statement (C) "While long-term bonds have more risks associated with them, they have the potential to bring in higher returns for the initial investment" is correct.
What are a long-term bond and a short-term bond?
Long-term bonds keep an investor's money locked up for a longer period than a short-term bond, giving the bond's price more time to be impacted by changes in interest rates and inflation.
As we know,
The fact that short-term bonds offer lower interest rates than long-term bonds is a drawback.
Long-term bonds have a larger chance of receiving higher rates since there is a bigger likelihood that interest rates will rise over time.
Bonds with a long term are often those that investors hold for almost ten years.
Thus, the statement (C) "While long-term bonds have more risks associated with them, they have the potential to bring in higher returns for the initial investment" is correct.
Learn more about the long-term bond and short-term bond here:
https://brainly.com/question/14224896
#SPJ2
