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The interest-rate risk of a bond is the unsystematic risk caused by factors unique in the bond.

A.True
B.False

1 Answer

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Final answer:

The interest-rate risk of a bond is a systematic risk, not an unsystematic risk caused by factors unique to the bond.

Step-by-step explanation:

False. The interest-rate risk of a bond is actually a systematic risk, not an unsystematic risk caused by factors unique to the bond. Interest rate risk refers to the risk of changes in interest rates affecting the value of the bond. When interest rates rise, the value of existing bonds decreases, and vice versa.

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User Robert Balent
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