Interest rate risk, Financial Management

Assignment Help:

Bonds are usually recognized by yields, which change from time to time owing to many market forces. There exists an inverse relationship between the bond price and the interest rates. When the interest rates rise, the bond's price decline; and when interest rates decrease, the bond's price increase. As the price of the bond fluctuates with market interest rates, an investor is exposed to a risk because the price of a bond held in his portfolio will decline if market interest rates rise. This risk is called interest rate risk. 


Related Discussions:- Interest rate risk

State the objectives of corporate financial, State the objectives of Corpor...

State the objectives of Corporate financial Corporate financial objectives could be to: 1. Provide the link between business and the other entities in environmentand 2.

Explain the structure of main financial statement, Citilink has just comple...

Citilink has just completed its 2010/11 management accounts. The directors are going to review the financial statements in the next board meeting. You have to prepare a FINANCIAL

Hazard or risk, the procedures, techniques or strategies that could or shou...

the procedures, techniques or strategies that could or should be implemented to reduce the likelihood of harm > actions that could be taken to eliminate the hazard or reduce the r

Define effect of stock dividends and stock splits, What is the effect of st...

What is the effect of stock (not cash) dividends and stock splits on the market price of common stock?  Why do corporations declare stock splits and stock dividends? Stock splits

Classification of the cost, 1) Future cost and historical cost: financial ...

1) Future cost and historical cost: financial decision is based on the future cost and not on the historical cost. The decision related to the future and hence the cost are likely

State the concept of overtrading, State the concept of Overtrading Over...

State the concept of Overtrading Overtrading can result in insolvency which means companies have severe cash flow problems. This means that a thriving company, which may look v

Operation management, Select a business with which you are familiar and ide...

Select a business with which you are familiar and identify examples of customers using search, experience, and credence quality to evaluate the good or service

Define the term- cash purchases, Define the term- Cash purchases     Shar...

Define the term- Cash purchases     Shareholders of the target company are bought out completely and have no further stake in business. This is good if predator shareholders want

Example on controlling working capital, Q. Example on Controlling working c...

Q. Example on Controlling working capital? Describe how a manufacturing company could control its working capital levels and impact of the suggested control measures. Solut

Define primary advantage to a corporation of investing, What is the primary...

What is the primary advantage to a corporation of investing some of its funds in working capital? By investing in working capital a firm acquires the liquidity it requirements he

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd