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  3. (true or false?) the reinvestment risk of a bond

(TRUE or FALSE?) The reinvestment risk of a bond happens when the market...

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Finance

(TRUE or FALSE?)

  1. The reinvestment risk of a bond happens when the market rates change, we will be reinvesting the cash flows at a different rate than what we expected.
  2. Because the value of a bond is the future value of its future cash flows, the value of a bond will decrease as the interest rate declines, and vice versa.
  3. The value of a bond is the present value of its future cash flows.

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