Inv2601 assignment 2 - Study guides, Class notes & Summaries

INV2601 ASSIGNMENT 2 S - The study-notes marketplace Call/Whatsapp or SMS 066 077 8000 for assistance with Investment, Finance and other modules. Question 1 Answer: Reinvestment risk Explanation Lack of coupon payments on a zero coupon bond eliminates reinvestment risk. Reinvestment risk is a type of risk that a bondholder is exposed to when they receive cash inflows of which coupon payments are one. They might have to reinvest those funds at a relatively low yield if interest rates ha...