Define the terms interest rate risk and reinvestment rate risk How are these risks affected by maturities, call provisions, and coupon rates Why might different types of investors view these risks differently How would they affect the yield curve Illustrate your answers with bonds with different ma...

Interest rate risk is the risk that a bonds price will decline due to an increase in interest rates ...

Define the terms interest rate risk and reinvestment rate risk. How are these risks affected by maturities,

Question:

Define the terms interest rate risk and reinvestment rate risk. How are these risks affected by maturities, call provisions, and rates? Why might different types of investors view these risks differently? How would they affect the yield curve? Illustrate your answers with bonds with different maturities and different rates, but just discuss the effects of call provisions.
Coupon
A coupon or coupon payment is the annual interest rate paid on a bond, expressed as a percentage of the face value and paid from issue date until maturity. Coupons are usually referred to in terms of the coupon rate (the sum of coupons paid in a...