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Income Risk

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Income risk
The possibility that a portfolio's dividends will decline as a result of falling interest rates. Income risk is generally greatest for money market instruments and short-term bonds, and least for long-term bonds.

Income Risk
The risk that the yield of a fund investing in short-term debt securities will decrease because of a decline in interest rates. For example, suppose a mutual fund invests in money market securities with maturities of less than a year. If interest rates decline, then the yield on the money market fund will also decline because when the money market securities mature, the returns are reinvested at lower interest rates. Income risk is the same concept as interest rate risk, but the former applies to funds, while the latter pertains to individual debt securities.


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These papers were discussed: * Fatih Guvenen, University of Minnesota and NBER, and Anthony Smith, Yale University, "Inferring Labor Income Risk from Economic Choices: An Indirect Inference Approach" Robert Barro, Harvard University and NBER; Emi Nakamura and Jon Steinsson, Columbia University and NBER; and Jose Ursua, Harvard University, "Crises and Recoveries in an Empirical Model of Consumption Disasters" * James Kahn, University of Pennsylvania, "What Drives Housing Prices ?
has released a study showing that adding a lifetime guaranteed minimum withdrawal benefit to a traditional stock and bond retirement portfolio can increase income while decreasing income risk.
Other papers cover new measures to improve productivity, country-level production efficiencies, the impact of land fragmentation on rice production, future prospects for grain and means of handling peak demand for it, income risk and acreage in terms of soybeans and corn, commercial crops and grain crops, farmers' insurance, and price behavior in China's wheat futures market.
 
 
 
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