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Why Do Bonds Exhibit Interest Rate Risk

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Why do bonds exhibit interest rate risk?


Definitions:

Non-professionals

refers to individuals who are not formally trained or certified in a particular professional field.

General Adaptation Syndrome

A theoretical model created by Hans Selye that describes the body's short-term and long-term reactions to stress, consisting of three stages: alarm, resistance, and exhaustion.

Physiological-based Solution

An approach to solving problems that relies on understanding and modifying the body's natural processes.

Alarm Reaction

The initial phase in the body’s response to stress, activating various physiological changes for fight or flight.

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