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Price risk is the risk that: 1. market prices will increase in value making bonds more expensive to purchase. 2. interest payments will be reinvested

Price risk is the risk that:

1.

market prices will increase in value making bonds more expensive to purchase.

2.

interest payments will be reinvested at a lower rate than anticipated.

3.

bond values will change in response to changes in inflation rates.

4.

the bonds in a dedicated portfolio will decrease in value in response to an increase in interest rates.

5.

the principal amount will not be paid in full.

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