The Risk That Interest Rates Will Increase,and That Increase Will

question 28

True/False

The risk that interest rates will increase,and that increase will lead to a decline in the prices of outstanding bonds,is called "interest rate risk," or "price risk."

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Definitions:

Preferred Stock

A class of ownership in a corporation with a fixed dividend that has precedence over common stock dividends.

Capital Gains Yield

The price appreciation component of a stock's total return, calculated as the increase in the stock price divided by the initial price of the stock.

Next Dividend

Refers to the upcoming dividend payment that a company plans to distribute to its shareholders.

TOYS4U Stock

A hypothetical or specific example of stock representing equity ownership in the company TOYS4U, potentially subject to market fluctuations.