Changes in the general level of interest rates and shifts in the shape of the yield curve affecting securities' return are referred to as interest rate risk. Such changes generally affect securities inversely. Interest rate risk affects bonds more directly than common stocks and it is a major risk faced by all bondholders. As interest rates change, bond prices change in the opposite direction.
The possibility that a security or mutual fund will decline in value because of an increase in interest rates.
This is the financial risk to which a portfolio or institution is exposed to if interest rates change.... more on: Interest rate risk
A change in the price of a bond due to changes in the market level of interest rates. Longer maturity bonds are subject to greater price changes than are shorter maturities when the market level of interest rates change.
The risk of a decline in market value of an interest-bearing instrument due to changes in interest rates. For example, a rise in interest rates typically will cause the value of a fixed rate security to fall. On the other hand, a decrease in interest rates will cause the value of a fixed rate security to increase. Another risk associated with interest rate changes is call risk. Call risk is the risk that during periods of falling interest rates, a bond issuer will "call" or repay its higher yielding bonds before the maturity date of the bond. Under these circumstances, the Fund may have to reinvest the proceeds in an investment that provides a lower yield than the called bond.
the potential impact on the Company’s earnings and economic value due to changes in interest rates.
Possibility that interest rates will rise during the term of a loan thereby increasing the annual cost of borrowing.
The risk of loss due to movements in interest rates.
The potential for losses or reduced income arising from adverse moves in interest rates.
The risk that the value of a financial instrument will fluctuate due to changes in market interest rates.
The potential for gains or losses resulting from fluctuations in the market price of fixed-income securities (debt or preferred shares). Such price fluctuations are a consequence of changes in prevailing interest rate levels.
In general, rising interest rates cause fixed income investments to decrease in value and falling interest rates cause fixed income investments to increase in value. Fixed income investments with longer terms to maturity tend to be more sensitive to changes in interest rates. If an investor has invested directly in a fixed income security, such as a bond, this will be a concern if he/she wishes to sell the bond prior to maturity. If the bond is held to maturity, this type of risk has no impact. If an investor has invested in a bond mutual fund or income mutual fund, then these changes in interest rates and subsequent changes in fixed income security values will lead to changes in the net asset value of the mutual fund. The value of the investment in the mutual fund may decrease or increase.
The change in the price of a security resulting from a change in market interest rates.
A risk assumed by bond investors that interest rates will rise.
The risk for fixed interest securities and by borrowers with floating rate loans, when interest rates fluctuate. As interest rates rise, the market value of fixed interest securities declines.
Variation in the price of an asset caused by interest rate fluctuations.
a measure of how sensitive an investment's value is to the ups and downs of interest rates. Although all investments are to some degree affected by interest-rate movements, bonds are more directly affected. Generally, shorter-term bonds (one to three years) are less sensitive to interest-rate changes than are longer-term bonds.
the risk that the market value of a derivative will fluctuate due to changes in market interest rates.
Investors in bonds and bond funds must be acutely aware of the risk associated with interest rate changes. When interest rates rise, the values of outstanding bonds fall, and vice versa. In a rising rate environment, while you are receiving monthly bond interest payments as scheduled, your total returns may be eroding because of declining principal values. This is especially true with longer term holdings. Longer term bond issues (for example, 30-year Treasury Bonds) are much more sensitive to interest rate changes than short- or intermediate-term issues.
Sometimes also referred to as an element of market risk, interest rate risk involves the adverse effects of increases in market yields that reduce the present value of fixed interest investments in the reserve portfolio. Interest rate risk increases, ceteris paribus, with the duration of a portfolio.
possibility that a fixed-rate debt instrument will decline in value as a result of a rise in interest rates.
The change in the price of a debt security due to changes in the market interest rates is the interest rate risk. For debt oriented mutual fund schemes, this interest rate risk affects the NAV of the fund. A rise in the interest rates leads to a fall in the price of a fixed income security.
Risk that involves the competitive cost of money. This term is generally associated with bond prices, but it applies to all investments. In bonds, the price carries an interest rate risk because if bond prices rise, outstanding bonds will not remain competitive unless their yields and prices are adjusted to reflect the current market.
exposure to loss resulting form a change in interest rates. Hedging strategies are designed to minimise, possibly eliminate, interest rate risk.
The risk that the value of fixed-income securities (e.g., bonds) will decline when interest rates rise.
Promissory notes and bills of exchange in their usual form have a face value reduced by the discount rate for the tenor of the period of the note or bill of exchange to their present value. This means the instrument is a fixed rate instrument and if the holder does not match the funding period or buy a derivative hedge, then they will carry an interest rate risk.
the risk of rising interest rates for an income producing investment (such as a bond). Bond prices move inversely to interest rate moves. So if interest rates increase the price of bonds will fall. For short term bonds (under 3 years) the change in prices will be relatively minor compared to the change in price for a long term bond (10+ years).
The risk of unexpected changes in an interest rate.
Risk due to uncertain future interest rates.
The risk t a rise in interest rates will cause the price of bonds to fall. In general, there is an inverse relationship between interest rates and bond prices so t when interest rates rise, bond prices fall and vice versa.
Refers to the certain risk that interest rates will fluctuate and these changes may adversely impact the value of a portfolio. For example, an investor with long-term bonds may suffer a reduction in the value of those bonds as interest rates rise.
The possibility that a fixed debt instrument, such as a bond, will decline in value due to a rise in interest rates.
If you have securities that you bought for the fixed income feature (such as bonds and preferred stock), if the interest rate changes your piece of the pie will move in the opposite direction.
The risk that a bond's price will fall when interest rates rise.
The risk of a decrease in the value of a security caused by changing interest rates. For example, raising interest rates reduces the value of a bond.
the potential change in a security's value due to a change in interest rates
The risk that the value of a fixed-income investment will drop as interest rates rise. That's because bond prices are inversely related to interest rates (if one goes up, the other goes down).
For a bond, the risk that a rise in interest rates will decrease the bond's price. For a depository institution, also called funding risk, the risk that spread income will suffer because of a change in interest rates.
The risk that a bond's price will decrease due to rising interest rates.
The risk that the value of an investment will fluctuate with changes in the general level of interest rates.
The potential for losses arising from changes in interest rate
Risk arising from fluctuating interest rates. For example, a bond's price drops as interest rates rise.
The possibility that a bond investment will decline in value because of an increase in interest rates.
(Risque de taux d'intérêt) Possibility that a fixed-income asset will increase or decrease in value due to changes in interest rates.
The risk that should interest rates rise, an investment in a fixed income security will decrease in value. This will cause a decrease in the overall return which the investor receives as it relates to newly issued securities.
The possibility that a bond's or bond mutual fund's value will decrease due to rising interest rates.
The potential for losses arising from changes in interest rates.
The prospect that Treasury and agency securities will decline in price if economy-wide interest rates rise.
Risk that a change in the interest rates will negatively affect the value of an ...
is the risk of financial loss arising from fluctuations in interest rates.
The risk that a security's value changes due to a change in interest rates. For example, a bond's price drops as interest rates rise. For a depository institution, also called funding risk, the risk that spread income will suffer because of a change in interest rates.
This is the risk that changes in interest rates will adversely affect the yield or value of a portfolio’s investments in debt securities.
Most often associated with fixed-income investments, this is the risk that a security's or fund's price will fall with rising interest rates.
uncertainty about the future value of an asset or firm that arises from uncertainty about future interest rates
The uncertainty of returns on investments due to changes in market rates of interest.
The risk created by changes in market interest rates. For example, the value of bonds usually falls when interest rates rise. See Investment risk.
The risk that a change in interest rates or in the yield curve will have a negative impact on a company's financial performance, especially due to increased cost of funds or reduced return on surplus cash invested. See interest rate exposure.
A risk faced by investors who invest in bonds characterized by an individual being locked into a lower interest rate when interest rates are generally increasing in the economy.
The risk in which profits may decline or losses may occur because an increase in interest rates is known as an interest rate risk.
The risk that interest rates will rise and reduce the value of an investment. For example, bond prices generally move in the opposite direction of interest rates. As interest rates rise, bond prices generally fall, and vice versa.
The risk that the value of a bond will depreciate in response to an increase in interest rates. Bond prices and yield have an inverse relationship, when the price of a bond falls the yield rises.
Interest rate risk is the risk that the relative value of a security, especially a bond, will worsen due to an interest rate increase. This risk is commonly measured by the bond's duration.