Barry McKenna's equity portfolio was strongly correlated to the performance of the S&P 500 Index. Barry was concerned that the S&P was overdue for a correction, so he liquidated the portfolio and moved to short-term Treasury securities that were yielding 2%. After one year, the S&P 500 returned 8%. What is the BEST term to describe the difference in the Treasuries and the S&P 500 as it relates specifically to Barry's situation?
A) Opportunity cost
B) Systematic risk
C) Interest-rate risk
D) Reinvestment risk

Answer rating: 100% (QA)

C Interestrate risk Interest rate risk is the probability of a decline in the value of an asset ... View the full answer