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What is reinvestment rate risk

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Problem - Sam Strother and Shawna Tibbs are vice presidents of Mutual of Seattle Insurance Company and co-directors of the company's pension fund management division. An important new client, the North-Western Municipal Alliance, has requested that Mutual of Seattle present an investment seminar to the mayors of the represented cities, and Strother and Tibbs, who will make the actual presentation, have asked you to help them by answering the following questions. What is reinvestment rate risk? Which has more reinvestment rate risk: a 1-year bond or a 10-year bond?

Reference no: EM132897605

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