When the investors investment horizon is less than the Macaulay duration of the bond she owns: A.

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When the investor’s investment horizon is less than the Macaulay duration of the bond she owns:

A. The investor is hedged against interest rate risk.

B. Reinvestment risk dominates, and the investor is at risk of lower rates.

C. Market price risk dominates, and the investor is at risk of higher rates.

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Fixed Income Analysis

ISBN: 9781119850540

5th Edition

Authors: Barbara S. Petitt

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Question Posted: Nov 08, 2023 03:41 AM

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When the investors investment horizon is less than the Macaulay duration of the bond she owns: A.

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The correct answer is B Reinvestment risk dominates and the investor is at risk of lower rates When ...View the full answer

Fixed Income Analysis

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