The Risk That Interest Rates Will Increase,and That Increase Will

question 28

True/False

The risk that interest rates will increase,and that increase will lead to a decline in the prices of outstanding bonds,is called "interest rate risk," or "price risk."

---

Definitions:

Noncontrolling Interest

Equity in a subsidiary not attributable directly or indirectly to the parent company, reflecting the portion of subsidiary earnings not owned by the parent.

Noncontrolling Interest Valuation

The process of determining the value of minority shareholders' equity in a subsidiary that is not wholly owned by the parent company.

Treasury Stock

Shares that were issued and subsequently reacquired by the company, held in the company's treasury, and are not considered when calculating earnings per share or dividends.

Bonds Payable

A form of long-term debt issued by corporations or governments that promises to pay the bondholder a specified sum of money at future dates.