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dhakal26 02-09-2018 11:58 PM

What is reinvestment risk on debt ?
Suppose you are holding 2 year 9%debenture. After the maturity period you will get back your money. But due to decrease in interest rate, you have to reinvest your money less than 9% that may be on 8% or lower. That is exactly reinvestment risk. The debenture having short maturity has higher reinvestment risk.

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