The riskiness of an asset's returns due to changes in interest rates is
A)exchange-rate risk.
B)price risk.
C)asset risk.
D)interest-rate risk.

Question

Quizplus · Accepted Answer

Interest-rate risk refers to the risk associated with changes in interest rates, which can affect the value of an asset's returns. As interest rates increase, the value of fixed-income assets (such as bonds) typically decrease, whereas the value of equities may decrease if higher interest rates lead to a slowdown in economic growth. Therefore, changes in interest rates can have a significant impact on the riskiness of an asset's returns.

The Riskiness of an Asset's Returns Due to Changes in Interest