Asked by Chae-Lynn Normore on Apr 29, 2024
Verified
In addition to interest rate risk and the real rate, what other factors can bond yields be affected by?
Bond Yields
The return an investor realizes on a bond, often expressed as an annual percentage.
Interest Rate Risk
The potential for investment losses due to fluctuations in interest rates that affect the value of interest-bearing assets.
Real Rate
The interest rate adjusted for inflation, reflecting the real cost of funds to the borrower and the real yield to the lender.
- Understand the concepts of bond risk including interest rate risk, default risk, and inflation risk.
Verified Answer
CM
Colin MacKenzieMay 01, 2024
Final Answer :
Bond factors can also be affected by the following:
Bond provisions
Default risk
Expected future inflation
The lack of liquidity
Bond provisions
Default risk
Expected future inflation
The lack of liquidity
Learning Objectives
- Understand the concepts of bond risk including interest rate risk, default risk, and inflation risk.