Interest Rate Risk Is

question 29

Multiple Choice

Interest rate risk is

• A) duration.
• B) the extent that coupon rates vary with time.
• C) the potential variability in the realized rate of return caused by changes in market rates.
• D) the potential variability in the bond maturity caused by changing discount rates.

---

Definitions:

Equity Instruments

Financial instruments that signify an ownership interest in an entity, such as stocks or share options.

Reload Features

Options or clauses in certain agreements that allow for the automatic renewal or extension under specific conditions.

Initial Options

The first set of choices or decisions available in a particular situation or as part of a negotiated agreement.

Fair Value

The gain from liquidating an asset or the outgo for transferring a liability in a well-planned trade with market stakeholders on the designated measurement day.