The risk that a bond's coupons will have to be reinvested at lower rates is referred to as

Question

Quizplus · Accepted Answer

Reinvestment risk is the risk that the cash flows received from a bond will have to be reinvested at a lower rate, leading to a decrease in the overall return. This risk is specific to bonds and is not related to external economic factors such as inflation or default risk. Interest rate risk is a more general term that refers to the risk of changes in interest rates affecting the value of all fixed-income investments.

The Risk That a Bond's Coupons Will Have to Be