Why the high volatility of interest results in less sensitivity of the value of debt?

what’s the process for this affection?

Why the high volatility of interest results in less sensitivity of the value of debt?

what’s the process for this affection?

High volatility in interest rates impacts bond value if, bond has sufficient life left.

The higher the rate lower the value of bond, lower the rate higher the value of bond. This applies when the maturity of bond is not in near future.

If Bond is near to maturity then volatility in interest rate doesn’t affect the bond value since multiplier of ‘t’ factor is very low.

1.Sensitivity of bond value to volatility of interest rates is (a function of) Duration.

Closer to maturity,duration is lower,so will be sensitivity of bond value to interest rate.

2.Yield on a fixed income product,is a function of time to maturity,credit risk,and liquidity premium,and inflation, among other things-If maturity is closer,inflation/liquidity scenario is more "visible"and impact of yield changes on bond value will discount purchasing power reduction.

3.If the question is about progressively higher volatilty and its impact on bond value,regardless of residual maturity i think the impact in percentage term will not be linear,1/99 is more than 1/100 for change in price by one unit on 1 basis point change in yield.