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Question
Price risk is the risk that:A. coupon payments will be reinvested at a rate that is less than the bond's yield-to-maturity.
B. the bond principal will not be paid in full or on time.
C. the bonds in a dedicated portfolio will decrease in value in response to an increase in interest rates.
D. market prices increase due to market interest rate changes making bonds more expensive to purchase.
E. the yield-to-maturity will be less than the inflation risk causing the real rate of return to be negative.
Answer
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