Bond Risk

Bond Risk

The risk associated with investing in bonds. Major examples of bond risk include interest rate risk, which is the possibility one may not be able to reinvest at the same interest rate upon maturity; credit risk, which is the risk of default by the issuer; and inflation risk, which is the possibility that the inflation rate may outpace the return on the investment.
References in periodicals archive ?
A repeat of the 2011 Eurozone debt crisis is almost assured in 2015 and yet financial markets price EU bond risk as though it was negligible and Draghi's European Central Bank actually can buy bonds.
India's bond risk has fallen the most among the BRIC nations this year.
Modest adjustment of the criteria used in mortgage bond risk modeling would have radically altered the expected outcome, in some cases changing a huge profit to a disastrous loss.
This jump in perceived bond risk premium, along with a higher 10-year U.
Corporate bond risk fell in Europe by the most in seven months.
Debt inflows are picking up even after the Federal Reserve said on December 18 that it will start paring asset purchases that have driven capital to emerging markets, as local bond risk has fallen to the lowest level in three months.
s 500 - To unveil stress test scenarios after EU spring forecasts - Wants consistency in banks' sovereign bond risk weightings Too few European banks have been wound down over the past few years, the chairman of the European Banking Authority (EBA), Andrea Enria, was quoted as saying in an interview published on Monday.
Strategic Relationships : Dag Dyrdal, formerly chief strategic relations officer of the Norway sovereign wealth fund, has joined Japonica to assist in managing select Japonica Partners strategic relationships in Europe and Asia and in selectively communicating the competitive advantages of Japonica's intrinsic value model in assessing sovereign bond risk and return.
An examination of the CAPM beta of inflation-indexed bonds and the CAPM beta of breakeven inflation returns--the return on a long-short portfolio long inflation-indexed bonds and short nominal bonds of equivalent duration--over the period that starts in 1997 suggests that the decline in nominal bond risk in recent years has been the result of a decline in both the real interest risk and the inflation risk of nominal bonds.
HSBC's chief European economist, Janet Henry, agreed that while the road to a resolution of the euro crisis would be long and winding, the ECB had, by reducing bond risk premiums and triggering a rally in equity prices, eased financial conditions in a way that should help the economy.
The IMF has issued a warning about increasing Japanese government bond risk in the domestic banking system in Japan.
Sovereign bond risk has also heightened and international investors are understandably hesitant to enter Middle Eastern markets.