interest-rate risk
Interest rates for municipal bonds, for the most part, is a fixed rate, not a floating rate with the market. This means that the rate of interest received is fixed for the duration of the bond till maturity, regardless of what the market does.
For example, if interest rates rise in the market, your bond will be yielding a lower payment than what you could get in the market for a newly issued bond.
- Part of Speech: noun
- Industry/Domain: Financial services
- Category: Personal investment management
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(Beijing, China)