Examveda
Examveda

An effect of interest rate risk and investment risk on a bond's yield is classified as

A. reinvestment premium

B. investment risk premium

C. maturity risk premium

D. defaulter's premium

Answer: Option C

Solution(By Examveda Team)

An effect of interest rate risk and investment risk on a bond's yield is classified as maturity risk premium. A maturity risk premium is the amount of extra return you'll see on your investment by purchasing a bond with a longer maturity date.

This Question Belongs to Commerce >> Financial Management

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