Explain the two components of interest rate risk

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1. Explain the two components of interest rate risk Are they affected by the maturity of the bond?

2. Say your parents give you money for a 5 year olds college education. Assuming you had no intention of using your money for anything other than that purpose, what would be the approximate maturity of bonds that would minimize components of interest rate risk?

Reference no: EM131058345

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