Which one of the following is the risk that market interest rates may increase causing the price of a bond to decline?

Question

Quizplus · Accepted Answer

Interest rate risk refers to the risk that the market interest rates may increase causing the price of a bond to decline. The other options are:
A) Inflation risk refers to the risk that inflation may reduce the purchasing power of the bond's cash flows.
B) Reinvestment risk refers to the risk that the cash flows from the bond may not be able to be reinvested at the same rate.
C) Yield risk is not a commonly used term in finance.
E) Default risk refers to the risk that the issuer of the bond may default on its payments.

Which One of the Following Is the Risk That Market