Reinvestment risk

Definition:

The risk that proceeds received in the future may have to be reinvested at a lower potential interest rate.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Plain vanilla

A term that refers to a relatively simple derivative financial instrument, usually a swap or other derivative that is issued with standard features.

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