In addition to inflation risk,10- year government bonds face which type of risk?
A)Credit risk
B)Systematic risk
C)Interest rate risk
D)Default risk

Question

Quizplus · Accepted Answer

10-year government bonds face interest rate risk because their market value fluctuates with changes in interest rates. When interest rates rise, the bond's value will decrease and vice versa. This risk is apart from inflation risk, credit risk, and default risk. Systematic risk is not relevant to 10-year government bonds as it refers to risks associated with the overall market which may not be relevant to a specific bond.

In Addition to Inflation Risk,10- Year Government Bonds Face Which