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Figure 1.1
Identify the levels of organization in the figure above.
-Label C: ______________________________
Interest Rate Price Risk
The risk that the value of an investment will decrease due to a change in interest rates.
Zero Coupon Bond
A type of bond that does not pay interest during its life but is sold at a deep discount from its face value.
Reinvestment Rate Risk
The risk that cash flows from an investment will be reinvested at a lower interest rate than the original investment rate, affecting future returns.
Coupon Bond
A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until the maturity date, at which point the principal is repaid.
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