Which One of the Following Is the Risk That Market

question 55

Multiple Choice

Which one of the following is the risk that market rates may increase causing the price of a bond to decline?

• A)inflation risk
• B)reinvestment risk
• C)yield risk
• D)interest rate risk
• E)default risk

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Definitions:

Current Liabilities

Short-term financial obligations that a company is required to pay within a year.

Return on Equity

A measure of a company's profitability that calculates how much profit is generated with the money shareholders have invested, reflecting financial performance and efficiency.

Net Income

The total earnings of a company after subtracting all expenses, taxes, and costs from its total revenue.

Owner's Equity

This financial term represents the owner’s interest in the assets of a business, calculated as the difference between the business assets and its liabilities.