Products & RisksCâu 43 / 125
Reinvestment risk is most significant for an investor who:
a.Holds a zero-coupon bond to maturity
b.Owns common stock paying no dividend
c.Owns high-coupon bonds and must reinvest the periodic interest at prevailing rates
d.Holds cash in a checking account
Giải thích
Reinvestment risk is the danger that periodic cash flows (coupons or called principal) must be reinvested at lower prevailing rates, reducing overall return. High-coupon and callable bonds are especially exposed. A zero-coupon bond held to maturity has no interim cash flows to reinvest, so it avoids this risk.
Luyện miễn phí toàn bộ 125 câu hỏi — không cần đăng ký.
Câu hỏi liên quan cùng chủ đề
- An investor buys 100 shares of XYZ at $48 and buys 1 XYZ 45 put for 2 (a protective put). What is the maximum loss?
- The Options Clearing Corporation (OCC) functions as:
- Systematic risk refers to:
- Credit (default) risk on a corporate bond is best assessed by reviewing:
- A zero-coupon bond is purchased at a deep discount and:
- Which of the following bonds is generally most sensitive to a given change in interest rates?
Cập nhật gần nhất: · quy trình kiểm tra
Đội Ngũ Biên Tập PrepPass · Đối chiếu với FINRA Series 7 General Securities Representative Exam · Quy trình kiểm tra