Rate Level Risk

外汇网2021-06-21 22:27:51 54

A type of interest rate risk which asserts that the characteristics of interest rate fluctuation are variable (as opposed to constant) over a period of time. Although interest rates are expected to fluctuate over the period of an investment, the probability of an interest rate change is not always constant, nor is the magnitude of the volatility of interest rate changes.

|||Generally speaking, it is impossible to pdict with certainty the characteristics of a changing variable such as interests rates into the future. While it is possible to make reasonably accurate pdictions, some amount of uncertainty still exits. This uncertainty repsents a tangible risk, which must be incorporated into the price of an investment vehicle.

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