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Old 02-09-2018, 10:58 PM
dhakal26 dhakal26 is offline
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Join Date: Feb 2018
Location: Nepal
Posts: 22
Post 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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