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reinvestment risk


Definition
The risk resulting from the fact that interest or dividends earned from an investment may not be able to be reinvested in such a way that they earn the same rate of return as the invested funds that generated them. For example, falling interest rates may prevent bond coupon payments from earning the same rate of return as the original bond.

Related Terms

split coupon bond -  More

zero-coupon bond -  More

accrual bond -  More

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