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Mary Sheets Is Considering Investing in 30 Year Corporate Bonds

question 25

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Mary Sheets is considering investing in 30 year Corporate Bonds issued by Duke Energy Company. She knows that she will earn an interest rate of 8% by purchasing these bonds. However, she is concerned because she might need to take her money out of this investment in a year and she has heard that she might have to sell the bonds at a significantly lower price than she will purchase them for. What type of risk is Mary concerned about?


Definitions:

Change Blindness

A perceptual phenomenon where a person fails to notice significant changes in the visual environment due to brief distractions or interruptions.

Failing Vision

A decline in the ability to see clearly, which can include a variety of disorders affecting sight.

Attentional Blink

A phenomenon where the brain momentarily unable to process a second stimulus if it occurs too soon after the first.

Second Stimulus

An additional stimulus presented following the first, which can modify the response to the initial stimulus.

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