Interest rate risk
The chance that a security's value will change 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.
Nearby TermsInterest rate parity line (IRP) Interest rate parity theorem Interest rate risk Interest rate swap Interest subsidy
Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University