Risk to bondholders comes from
1)possibility of default
2)higher interest rates
3)higher inflation

Question

Quizplus · Accepted Answer

Bondholders face risks from the possibility of default, higher interest rates, and higher inflation. Default risk affects the ability to receive principal and interest payments. Higher interest rates can lead to a decrease in bond prices. Higher inflation erodes the purchasing power of future interest payments and principal.

Risk to Bondholders Comes from