An investor has two bonds in his portfolio that have a face value of $1,000 and pay a 12% annual coupon. Bond L matures in 12 years, while Bond 5 matures in 1 year. b. Why does the longer-term bond's price vary more than the price of the shorter-term bond when interest rates change? I. The change in price due to a change in the required rate of return decreases as a bond's maturity increases. II. Long-term bonds have lower interest rate risk than do short-term bonds. III. Long-term bonds have lower reinvestment rate risk than do short-term bonds. IV. The change in price due to a change in the required rate of return increases as a bond's maturity decreases. V. Long-term bonds have greater interest rate risk than do short-term bonds