Question

Assume that you have a short investment horizon (less than 1 year). You are considering two investments: a 1-year Treasury security and a 20-year Treasury security. Which of the two investments would you view as being riskier? Explain.

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Remember, investment horizon refers to how long investors plan to hold investments. Thus, an investor with a short investment horizon does not want to hold investments for more than a few years. This is so because the investor might view long-term investments as being riskier than short-term.

Answer:\textbf{Answer:}

20-year Treasury security would be viewed as being riskier by an investor with a short investment horizon

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