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Explain the pro and con arguments to creation of buffering roles.
Interest Rate Risk
The potential for investment losses due to changes in interest rates.
Zero-Coupon Bonds
Bonds that do not pay periodic interest and are issued at a significant discount to their face value, maturing at par value.
Life Insurance
A contract between an insurer and an insured, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person.
Upside Potential
The forecasted amount by which the price of an investment, asset, or market could rise.
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