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Business, 05.11.2021 03:30 boss1373

The Dillinger State Bank has purchased a corporate bond from the Interstate Manufacturing Company that has 15 years to maturity and has a coupon rate of 12.5%. Market interest rates have recently declined to 8% and the Dillinger State Bank is worried that the Interstate Manufacturing Company will exercise its right to retire the bonds early, and issue new corporate bonds with a lower coupon rate. What type of risk is the Dillinger State Bank worried about

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The Dillinger State Bank has purchased a corporate bond from the Interstate Manufacturing Company th...
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