Which of the following risks associated with preferred stocks or government or corporate bonds is a result of changes in rates in the economy?

Question

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Interest rate risk is the risk associated with changes in rates in the economy. As interest rates rise, the value of preferred stocks and bonds decreases, as the returns offered by newer bonds with higher interest rates become more attractive to investors. Conversely, as interest rates fall, the value of preferred stocks and bonds increases, as their fixed returns become more attractive compared to newer bonds with lower interest rates. Inflation risk (A) refers to the risk of loss in purchasing power due to a rise in prices. Business failure risk (C) refers to the risk of a company going bankrupt or becoming insolvent, while market risk (D) refers to the risk of the general stock market declining. Stock risk (E) refers to the risks associated with a particular stock, such as changes in the company's management or competitive landscape.

Which of the Following Risks Associated with Preferred Stocks or Government