The risk that a dedicated portfolio will decrease in value due to interest rate changes is ________ risk.

Question

Quizplus · Accepted Answer

Price risk refers to the risk of a portfolio decreasing in value due to changes in interest rates. Immunization is a strategy used to mitigate price risk, but it is not a type of risk. Market risk refers to the overall risk of the market declining, not necessarily due to interest rate changes. Coupon rate and maturity are characteristics of fixed income securities, but they do not directly relate to the risk of a dedicated portfolio decreasing in value due to interest rate changes.

The Risk That a Dedicated Portfolio Will Decrease in Value