In each of the following scenarios, identify the risk associated with the bond.
(a) You buy a bond for 10 years at an annual real rate of return of 4.5%, but several years later, market interest rates on other bonds rise.
(b) You buy a five-year bond at an annual interest rate of 2.9%, but have to cash it suddenly to pay for an unexpected surgery, and get a low price for the bond.
(c) You buy a bond from a new company that fails after two years, and you lose your investment.
(d) You buy a bond at a 3% annual rate of return for four years, but after two years, comparable new bonds have rates of 4.5%.

Question

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The Answer of In each of the following scenarios, identify the risk associated with the bond.
(a) You buy a bond for 10 years at an annual real rate of return of 4.5%, but several years later, market interest rates on other bonds rise.
(b) You buy a five-year bond at an annual interest rate of 2.9%, but have to cash it suddenly to pay for an unexpected surgery, and get a low price for the bond.
(c) You buy a bond from a new company that fails after two years, and you lose your investment.
(d) You buy a bond at a 3% annual rate of return for four years, but after two years, comparable new bonds have rates of 4.5%.

In Each of the Following Scenarios, Identify the Risk Associated