Asked by Morgan Jones on Jul 23, 2024
Verified
The interest rate risk premium is included in the term structure of interest rates.
Interest Rate Risk Premium
The compensation investors demand for bearing interest rate risk.
Term Structure
The relationship between interest rates or bond yields and different terms or maturities.
- Acquire knowledge on the structure of interest rates and its constituents.
Verified Answer
NV
Nahjea vassallJul 29, 2024
Final Answer :
True
Explanation :
The interest rate risk premium is included in the term structure of interest rates to compensate investors for the increased risk associated with longer-term investments, reflecting the uncertainty and potential for changing interest rates over time.
Learning Objectives
- Acquire knowledge on the structure of interest rates and its constituents.
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