An effect of interest rate risk and investment risk on a bond's yield is classified as

An effect of interest rate risk and investment risk on a bond's yield is classified as Correct Answer maturity risk premium

An effect of interest rate risk and investment risk on a bond's yield is classified as maturity risk premium. A maturity risk premium is the amount of extra return you'll see on your investment by purchasing a bond with a longer maturity date.
Bissoy MCQ

Related Questions

Identify the correct statements from the following:
P. 0.2% yield strength of a material implies 0.2% of the yield strength.
Q. Von-Misses yield criterion implies that yielding occurs when the distortion energy reaches a critical value.
R. Radius of the cylinderical Von-Misses yield surface increases as the grain, size of a single phase material decreases.
S. Tresca's yield criterion gives a circular cylinderical surface in the space of the three principal stresses.
Shawn invested one half of his savings in a bond that paid simple interest for 2 years and received Rs.550 as interest. He invested the remaining in a bond that paid compound interest, interest being compounded annually, for the same 2 years at the same rate of interest and received Rs.605 as interest. What was the value of his total savings before investing in thesetwo bonds?
Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R). Read the statements and choose the correct answer:
Assertion (A) The nominal interest rate comprises of a real interest rate and an expected rate of inflation and it adjusts when the inflation rate is expected to change. Hence, in the perfect international capital markets, real rate of returns are equal in the two countries.
Reason (R) The international fisher effects states that the nominal interest rate differential must be equal to the expected inflation rate differential In the two countries.
Yield of interest rate which is below than coupon rate, this yield is classified as
Which of the following statement/s is/are correct of floating Rate Notes?
1. These are debt instruments on which variable interest rate is payable.
2. The rate of interest is linked to a benchmark rate of interest and changes with the change in such bench mark rate of interest.
If the specimen is deformed plastically beyond the yield stress in one direction, e.g., tension and then after unloading it is loaded in the opposite direction, e.g., compression, it is found that the yield stress is less than the original yield stress. This dependence of yield stress on direction loading is called ____________
The main components of market risk are a) Liquidity risk b) Interest rate risk c) Currency risk
Bonds that are considered as junk bonds and termed as higher yield are classified as
Which of the following statements are true/false?
1. A minimum rate of wages for the time spent by employees for the production of output is minimum time rate.
2. Minimum piece rate is the rate based on the quantity of the output employees have produced.
3. The guaranteed time rate is a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis.
4. A minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis is overtime rate.
Re-arrange the following sentences into a meaningful paragraph. (A) comes into effect from today. The bank's savings account rate was 3.5 per cent during March 2003 to May 2011 for all savings bank account customers (B) The bank's decision comes two days ahead of RBI's monetary policy meet and is likely to trigger (C) with deposits of above Rs 1 crore, it said in a statement. The two-tier savings bank account interest rate (D) to 3.5 per cent, lowest in six years, a decision that will impact 90 per cent of its customers (E) The country's largest lender however will continue to pay 4 per cent interest on savings bank accounts (F) SBI today cut interest rate on savings bank account deposits up to Rs 1 crore by 0.5 per cent (G) rate war among peers. SBI's savings bank account base is of around Rs 9 lakh crore.