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Management · Q541

Financial Management

Graduate and Post Graduate · Management · question 541

Q541

Reinvestment risk of bonds is higher on

A.
short maturity bonds
Answer
B.
high maturity bonds
C.
high premium bonds
D.
high inflated bonds

Answer: Option A

Solution

Answer: Option A
Solution:
Reinvestment risk of bonds is higher on short maturity bonds. Short-term bond funds are mutual funds that invest in bonds with a maturity period less than 5 years.