n NISM Certifications
NSM General NISM
Medium

What is rating migration risk in fixed income securities?

Practice question from Risk, Return & Performance of Funds Test — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    The risk of interest rates changing

  2. B

    The risk of the issuer being unable to repay the principal amount.

  3. The risk which could impact the price on account of change in the credit rating

    Correct answer

  4. D

    The risk of the security's duration increasing.

A full explanation for this question is being written. In the meantime, the correct answer is highlighted above.

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