SHORT- & LONG-TERM INTEREST RATES Short- and long-term interest rates generally move in the same direction Short-term rates tend to be more volatile and lower than long- term rates

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter4: Bond Valuation
Section: Chapter Questions
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can you explain this please. and the graph also. not to all and please be very  detailed and short so we can understand clearly.

SHORT- & LONG-TERM INTEREST
RATES
Short- and long-term interest rates generally move in the same
direction
Short-term rates tend to be more volatile and lower than long-
term rates
Figure 5.4 Short- and Long-Term Interest Rates
20
18
16 F
14E
Long-term
(10 Year)
Interest Rate
4
Short-term
(3 Мonth)
2
Interest Rate
1956
1960
1964
1968
1972
1976
1980
1984
1988
1992
1996
2000
2004
2008
2012
Date
2.
6.
Interest Rate (Percent)
Transcribed Image Text:SHORT- & LONG-TERM INTEREST RATES Short- and long-term interest rates generally move in the same direction Short-term rates tend to be more volatile and lower than long- term rates Figure 5.4 Short- and Long-Term Interest Rates 20 18 16 F 14E Long-term (10 Year) Interest Rate 4 Short-term (3 Мonth) 2 Interest Rate 1956 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 2008 2012 Date 2. 6. Interest Rate (Percent)
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