The risk that market interest rates may change, affecting the value of a bank's assets and liabilities, is known as
A)withdrawal risk.
B)default risk.
C)interest-rate risk.
D)foreign-exchange risk.

Question

Quizplus · Accepted Answer

Interest-rate risk is the risk that arises for bond owners from fluctuating interest rates. How much interest-rate risk a bond has depends on how sensitive its price is to interest rate changes in the market. The sensitivity depends on two things, namely the bond's time to maturity, and the coupon rate of the bond.

The Risk That Market Interest Rates May Change, Affecting the Value