Interest-rate risk results from: a. bond prices being fixed over the life of the bond. b. a mismatch between an indivi...
Interest-rate risk results from:
a. bond prices being fixed over the life of the bond.
b. a mismatch between an individual's investment horizon and a bond's maturity.
c. the fact that most people hold bonds until they mature.
d. inflation being uncertain.
Homework Answers
Interest-rate risk results from: a.) bond prices being fixed over the life of the bond.
Interest rate risk is the possibility that the value of an investment will decline as the result of an unexpected change in interest rates. This risk is most commonly associated with an investment in a fixed-rate bond.
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