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Freida, who lives in Covington, Louisiana purchased three bonds from a company based in Brazil that were yielding 9.75% and paid a 12% coupon, semi-annually.

Freida, who lives in Covington, Louisiana purchased three bonds from a company based in Brazil that were yielding 9.75% and paid a 12% coupon, semi-annually. The company went bankrupt and Freida never received her money. What type of risk caused Freida's loss?

Interest rate risk.

Default risk.

Exchange rate risk.

Executive risk.

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