Interest rate risk-purchasing power risk-business risk

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Assume that someone asks you for some advice on investing in bonds. You are fully aware of the five risk categories explained in Chapter 10. Assume that the person asking for advice would like to know your opinion on which risk is the one in which to be most cautious. Which risk is it and why? Furthermore, explain how an investor could potentially mitigate his risk. Support your position with examples from resources. Please provide reference and in cite quotes in response.

5 risk are:

Interest rate risk

purchasing power risk

business/financial risk

Liquidity risk

call risk

Reference no: EM13826269

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