Examlex
Which of the following statements is true about a tough commitment?
Premium
An amount paid for an insurance policy, or the cost above the nominal or face value of a financial instrument.
Par Value
The nominal or face value of a bond, stock, or coupon as stated by the issuer, which is the value written on the face of the security.
Interest Rate Risk
The risk that an investment's value will change due to a change in the absolute level of interest rates.
Reinvestment Risk
The risk of having to reinvest income or principal at a lower interest rate in a fluctuating interest rate environment.
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