Question

What is the risk you are taking when investing in bonds? How can you minimize this risk?

Answer 1

Risk: The bonds you own will decline if interest rates rise, interest rate risk.

Minimalize:

- Don't buy bonds when interest rates are low or rising. Buy when stable.

- Stick to short term issues (3 - 5 years)

- Buy bond with different maturity dates

Step-by-step explanation:

Good luck <3