Risk Terms
Interest-Rate Risk
Definition
What is Interest-Rate Risk?
The possibility that changing market interest rates will reduce an investment's value or income appeal.
Example in practice
How This Looks in Practice
Existing bonds may fall in price when new government bonds are issued at higher yields.
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Related Terms
Risk Terms
Market Risk
The possibility of loss because broad market prices or rates move against an investment.
Risk TermsCredit Risk
The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.
Risk TermsLiquidity Risk
The risk that an asset cannot be sold quickly at a reasonable price or a redemption cannot be met promptly.
MiscellaneousBusiness Day
A day on which relevant financial institutions and markets are open for normal processing.