In the present value bond valuation model,risk is generally incorporated into the

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Risk is accounted for in the present value bond valuation model by adjusting the discount rate or required return. Investors demand a higher return for bearing more risk, which is reflected in the discount rate used to calculate the present value of future cash flows. Therefore, the higher the risk, the higher the discount rate, and the lower the present value of the bond's cash flows. Maturity amount, timing of cash flows, and adjusting individual cash flows do not directly account for risk in the present value bond valuation model.

In the Present Value Bond Valuation Model,risk Is Generally Incorporated