问题如下：
Assuming the term structure of yield volatility is downward sloping, which of the following conclusions is most appropriate?
选项：
A.Long-term rates are lower than short-term rates.
B.Short-term yields have greater volatility than long-term yields.
C.The price of short-term bonds always fluctuate more severe than long-term bonds.
解释：
B is correct.
Assuming the term structure of volatility is downward-sloping, the short-term yield will have more volatility than the long-term yield. However, the relationship between short-term rates and long-term rates can not be determined by the term structure of volatility. The bond price changes are products of two factors: the modified duration (convexity) of the bond, and the changes of the yield curve. So the price of short-term bonds may not always fluctuate more severe than long-term bonds.
老师 为什么C不对？
