Reinvestment risk
Market basicsThe risk that maturing money must be redeployed at a lower rate than before.
In plain terms
A 7.5% deposit maturing into a 5.5% world. Laddering maturities blunts it.
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 1 term
The risk that maturing money must be redeployed at a lower rate than before.
A 7.5% deposit maturing into a 5.5% world. Laddering maturities blunts it.