Dictionary

Reinvestment Risk

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Reinvestment Risk typically reflects the risk of not getting the same interest rate on the periodic payment (coupon) received by investors, if they wish to reinvest the periodic cash flows received by them. In the fixed income market, zero-coupon bonds are the only bonds which contain no reinvestment risk, as they get issued on discount and redeemed at par on maturity with no coupon or periodic cash.

Term of the day

Market Risk

What is a Market Risk? Market risk reflects the potential of reduction in the investment value due to the interplay of varying market forces in the direction t......
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