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

What do you mean by gross working capital, Q. What do you mean by Gross wor...

Q. What do you mean by Gross working capital? Gross working capital: - Gross working capital demotes to firms investment in current assets. Current assets are the assets which

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM, 6 KEY STAGES ...

6 KEY STAGES OF INVESTMENT DECISION WITH APPROPRIATE DIAGRAM

Banking sector securities, The banking sector has a vital and active ...

The banking sector has a vital and active role in the money market. The transactions taking place in these securities are large in size, both in terms of volumes

Asset-backed and mortgage-backed securities, When financial assets or bonds...

When financial assets or bonds are pooled together and offered to the investors for receiving the inflow of funds from these underlying assets, they are termed as asset

Why investment decision depend on financing decision, Why investment decisi...

Why investment decision depend on financing decision All these decisions interact, investment decision cannot be taken without taking the financing decision, working capital de

Buy and hold - passive strategy, A simple passive strategy involves b...

A simple passive strategy involves building a portfolio and holding it through time. The coupons as well as the proceeds of matured bonds are just reinvested in new iss

Leading rate in the credit market , LENDING RATES IN THE CREDIT MARKET ...

LENDING RATES IN THE CREDIT MARKET One of the crucial decisions involved while extending loans is the lending rate. Intermediaries will base their lending rate decisions on thr

Steps, how control the steps

how control the steps

How the net present value relate to the value of the firm, How does the net...

How does the net present value relate to the value of the firm? The net present value (NPV) is the dollar amount of the change to the value of the organization if the project wit

The authority and duties of shareholders, The authority and duties of membe...

The authority and duties of members (shareholders) Members and shareholders shall together and severally protect, conserve and actively exercise the supreme authority of the co

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