Explain why long-term (30-year) bonds generally trade at a higher yield than short-term maturities.

The reason behind the claim is the greater risk associated with long- term bonds. The
chances are as the duration for maturity of the bond lengthens, then risks of devaluation are high.
The inflation impact on the bonds with time progressively lowers the value of payment for the
bond hence a greater risk that is higher than the total interest on the bond’s price. The bonds
however, yield more as compared to the short term bonds as they are more volatile.

References

Rogers, J. H., Scotti, C., & Wright, J. H. (2018). Unconventional monetary policy and
international risk premia. Journal of Money, Credit and Banking, 50(8), 1827-1850.
Schill, M. J., & Xu, T. (2019). A Primer on Risk-Free Bonds.