All bonds that will not be held to maturity have interest rate risk which occurs because of the change in the price of the bond as a result of
A)interest-rate changes.
B)changes in the coupon rate.
C)default of the borrower.
D)changes in the asset's maturity date.

Question

Quizplus · Accepted Answer

Interest rate risk is the risk associated with the change in the value of the bond due to changes in the prevailing interest rates. When interest rates increase, the price of the bond decreases, and when interest rates decrease, the price of the bond increases. Therefore, all bonds that will not be held to maturity are subject to interest rate risk.

All Bonds That Will Not Be Held to Maturity Have