coupon reinvestment risk

coupon reinvestment risk definition - finance
The probability that when a bond or note matures, its coupon, or interest rate, will be lower than what the investor is currently receiving. As a result, when the investor tries to reinvest the proceeds from the bond or note, he or she will have to be satisfied with a lower interest rate. However, if interest rates rise, then the investor benefits.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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