Definition for : Interest rate risk
The holder of financial securities is exposed to the Risk of Interest rate fluctuations (when Interest rates fall/rise, the price of a Financial security usually rises/falls). Even if the issuer fulfils his commitments entirely there is still the Risk of a capital loss, or at the very least, an opportunity loss. See also Coupon reinvestment risk.
(See Chapters 21 and 47 of the Vernimmen)
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