Yield Sensitivity

Yield sensitivity, also known as interest rate sensitivity, is a measurement of how much the price of a fixed-income asset fluctuates as a result of changing interest rates. Securities and other asset classes that are more yield sensitive tend to have higher price fluctuations than those that are less yield sensitive. When choosing a fixed-income asset to sell on the secondary market, yield sensitivity should be taken into account. Interest rates and fixed-income asset prices are inversely related, so yield sensitivity affects both the buying and selling of an asset.