Examlex
Which of the following is true regarding flexibility?
Default Risk
Default risk is the chance that a borrower will be unable to make the required payments on their debt obligations.
Interest Rate Risk
The risk of loss to an investor from changes in the price of a bond that arise from changes in the market interest rate. Also called price risk and maturity risk.
Maturity Risk
Maturity risk pertains to the uncertainty and potential loss associated with holding a bond or other fixed-income investment until its maturity date.
Coupon
The percentage rate of interest a bond yields annually, based on its principal amount.
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