The coupon rate and the yield-to-maturity of a bond do not change over time for the buyer of that bond. The coupon rate never changes regardless of who holds the bond. The bond's yield-to-maturity does not change as long as the buyer holds the bond to maturity. If the investor sells the bond before its maturity date, though, that investor's yield on the bond will be affected by the market price of the bond received on the date of the sale.
Duration measures how vulnerable the market value of a fixed-income security is to future changes in market interest rates. When market interest rates increase, market values of fixed income securities decrease. And when market interest rates decrease, market values of fixed income securities increase. But not all fixed income securities vary in value by the same extent. How much an individual fixed income security will vary in value with changes in interest rates depends upon its duration. As a bond’s maturity date approaches, its duration shortens, and its market value becomes less sensitive to market interest rate changes. So a long-term bond's price sensitivity to a given change in interest rates will be greater the longer the maturity of the bond, and the bond will have more interest rate risk. A bond with a shorter maturity will be less sensitive to market rate changes and thus will have less interest rate risk.
A long-term bond's price sensitivity to a given change in interest rates will be greater the longer the maturity of the bond, and the bond will have more interest rate risk. A bond with a shorter maturity will be less sensitive to market rate changes and thus will have less interest rate risk. A bond with 15 years to maturity would have more interest rate risk than a bond with one year to maturity.
Both bonds have the same amount of interest rate risk, because both bonds have the same coupon rate and both have one year to maturity.
